Suppose a monopoly sells to two identifiably different types of customers, A and B, who are unable to practice arbitrage. The inverse demand curve for group A is PA = 10 - QA, and the inverse demand curve for group B is PB = 18 - QB
The monopolist is able to produce the good for either type of customer at a constant marginal cost of 2, and the monopolist has no fixed costs. If the monopolist practices group price discrimination, the profit maximizing prices charged to each type of customer are A) PA = 6, and PB = 10.
B) PA = 4 and PB = 8.
C) PA = 10, and PB = 6.
D) PA = 8, and PB = 4.
A
You might also like to view...
Resale price maintenance is a kind of ________ restraint and it ________ legal.
A) vertical; can be B) horizontal; is never C) vertical; is never D) horizontal; can be
marketing services that add "time value" include:
a) transportation b) processing c) marketing d) storage e) all of the above
The benefits of social regulation are
A) easy to measure by the marginal value method. B) often difficult to measure. C) obvious to almost everyone, but the costs are usually hidden. D) greater than the costs of social regulation in every example in the country today.
Related to the Economics in Practice on p. 294: In the price-fixing case against the Taiwanese firm AU Optronics, the DOJ claimed that the price fixing resulted in ________ paying more for products with LCD screens.
A. government agencies B. businesses C. consumers D. All of the above are correct.