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

question 2

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 $2 in one market and $12 in the other market.At these prices, the price elasticity in the first market is -2.50 and the price elasticity in the second market is -0.70.Which of the following actions is sure to raise the monopolist's profits?

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

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Definitions:

Neurotics

Individuals who experience high levels of anxiety, emotional instability, and excessive worrying, often related to neurotic disorders.

Basic Anxiety

A term by psychoanalyst Karen Horney, referring to feelings of helplessness and insecurity that adults experience because of childhood experiences.

Neurotic Needs

Excessive psychological needs that lead to unhealthy behaviors or patterns, often resulting from unresolved anxieties or conflicts.

Therapy Should

The principle that therapeutic interventions ought to aim at improving an individual's mental health and well-being.