If Different Markets for a Product Produced by a Monopolist

question 49

Multiple Choice

If different markets for a product produced by a monopolist can be separated and if the elasticity of demand differs between the two markets, then the monopolist will

• A) be able to make higher profits by using price discrimination.
• B) charge a single price in all markets.
• C) go out of business.
• D) sell the product in only one of the markets with inelastic demand curves.

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Definitions:

Standard Error

A statistical measure that describes the accuracy with which a sample distribution represents a population using standard deviation.

Economics Class

A course of study that examines the production, distribution, and consumption of goods and services, focusing on economic theories and principles.

Interval Estimate

An estimate of a population parameter that specifies a range within which the parameter is expected to lie.

Confidence Interval

A variety of data points, taken from sample statistics, with a high likelihood of encasing an unknown population trait's value.