A Monopolist Sells a Homogeneous Good in Several Distinct Submarkets

question 68

Multiple Choice

A monopolist sells a homogeneous good in several distinct submarkets, and the elasticities of demand differ in these submarkets. If the monopolist selects the rate of output to sell in each submarket by equating marginal revenue and marginal cost, then

• A) all customers in all markets end up paying the same price.
• B) it is not price discriminating, but merely price differentiating.
• C) customers in markets with more elastic demand will pay higher prices than customers in markets with less elastic demand.
• D) customers in markets with more elastic demand will pay lower prices than customers in markets with less elastic demand.

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Definitions:

Iron And Steel

Basic industries crucial for the development of any modern economy, involved in the production of metals from iron ore and the forging of industrial and consumer goods.

Industrial Development

The process of establishing and growing industries within a country or region, including the expansion of manufacturing, infrastructure, and technology, often leading to economic growth and societal changes.

Wage Labor

A form of labor where workers sell their labor power for a wage to an employer, under a contract of employment.

Automation

The technology by which a process or procedure is performed with minimal human assistance, often used in manufacturing, computing, and various services.