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

question 11

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 p₁ = $5 in one market and p₂ = $10 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 -0.10.Which of the following actions is sure to raise the monopolist's profits?

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

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Definitions:

Psychoanalytic Approach

A theory of psychology that emphasizes the unconscious processes and childhood experiences as determinants of an individual's mental and emotional state.

Humanistic Approach

A psychological perspective that emphasizes the study of the whole person and the uniqueness of each individual, often focusing on self-actualization and personal growth.

Personality

The fusion of qualities and characteristics that establish an individual's singular nature.

Maslow's Hierarchy

A theory of psychological health predicated on fulfilling innate human needs in priority, culminating in self-actualization.