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

question 1

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 $6 in one market and $8 in the other market.At these prices, the price elasticity in the first market is -2.40 and the price elasticity in the second market is -0.70.Which of the following actions is sure to raise the monopolist's profits?

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

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Definitions:

Population

A collection of the same species members who live and reproduce together in a specific location.

Diversity

The range of different species, genetic variations, and ecosystems within and between environments.

Response To Stimuli

The process by which organisms detect and react to changes in their internal and external environment.