Which of the Following Strategies Will Allow a Monopolist to Earn

question 70

Multiple Choice

Which of the following strategies will allow a monopolist to earn higher profits by employing a two-part tariff on consumers with different demands?

• A)Setting price equal to the marginal cost
• B)Setting price above the marginal cost
• C)Setting an entry fee equal to the consumer surplus
• D)Setting an entry fee higher than the consumer surplus

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Definitions:

Motivation

The intrinsic or extrinsic factors that stimulate people to act or behave in a certain way.

Moralizing

The act of expressing opinions about the rightness or wrongness of actions or behavior, often in a judgmental way.

Prescriptive

Relating to the imposition or application of rules or recommendations.

Counseling

A professional guidance process that helps individuals resolve personal, social, or psychological challenges and difficulties.