Suppose That a Price-Discriminating Monopolist Divides Its Market into Two

question 77

Multiple Choice

Suppose that a price-discriminating monopolist divides its market into two segments.If the firm sells its product for a price of $42 in the market segment where demand is relatively less elastic, the price in the market segment whose customers' demand is more elastic will be

• A)$42
• B)greater than $42
• C)less than $42
• D)less than marginal revenue in that market segment
• E)equal to marginal revenue in that market segment

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Definitions:

Marginal Product

The additional output generated by adding one more unit of a specific input, all other inputs being held constant.

Total Product

The total quantity of output produced by a firm using a given amount of inputs.

Law Of Diminishing Returns

An economic principle stating that adding an additional factor of production results in smaller increases in output.

Study Hours

The amount of time allocated by individuals for learning or educational activities.