If a third-degree price-discriminating pure monopoly sells the same product in two markets but charges a higher price in market X and a lower price in market Y, the pricing difference indicates that demand is ________.
A. relatively more elastic in market X than market Y
B. the same in both market X and Y
C. relatively less elastic in market Y than market X
D. relatively less elastic in market X than market Y
Answer: D
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A firm sells 1000 units per week. It charges $15 per unit, the average variable costs are $10, and the average costs are $25 . In the short run, the firm should
a. Shut-down as the firm is making a loss of $10,000 per week b. Shut-down as price is lower than average cost c. Continue operating as the firm is covering all the variable costs and some of the fixed costs d. Shut-down because it is cost effective to pay off the remaining fixed costs
In the long run in perfect competition, no firm can earn a normal profit
a. True b. False
Mutual funds that invest only in companies that meet certain criteria and usually exclude companies that produce tobacco, weapons, or alcoholic beverages are known as:
a. socially responsible funds. b. global funds. c. equity funds. d. fixed-income funds. e. money market funds.