A Price-Discriminating Monopolist Sells in Two Separate Markets Such That

question 3

Multiple Choice

A price-discriminating monopolist sells in two separate markets such that goods sold in one market are never resold in the other.It charges $6 in one market and $11 in the other market.At these prices, the price elasticity in the first market is -1.40 and the price elasticity in the second market is -0.90.Which of the following actions is sure to raise the monopolist's profits?

• A)Lower p₂.
• B)Raise p₁ and lower p₂.
• C)Raise p₂.
• D)Raise both p₁ and p₂.
• E)Raise p₂ and lower p₁.

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Definitions:

Unconscious Mental Image

Visual or symbolic representations in the mind that are not immediately accessible to conscious awareness.

Free Association

Method of uncovering unconscious conflicts in which the client is taught to talk about whatever comes to mind, without censoring any thoughts.

Humanistic

An approach in psychology that emphasizes empathy and stresses the good in human behavior, focusing on the individual's potential for growth and self-actualization.

Innate Capacity

An inherent ability or potential present from birth, not developed through experience.