A price discriminating monopolist will
A) charge a lower price to those consumers who have more elastic demand.
B) charge a higher price for a good with more market demand.
C) charge more to those consumers who have more substitute goods.
D) charge the same price to all consumers.
Answer: A
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Which of the following is not an advantage to an insurance company of insuring a large group of people for health insurance?
A) When all group members pay the premium, the problem of adverse selection is reduced. B) The characteristics of a large group are likely to reflect those of the entire population. C) When all group members pay the premium, the problem of moral hazard is reduced. D) It is easier to accurately predict the number of claims for a group than for an individual.
Information gathering for a moral hazard problem happens
a. Before the agent is hired b. After the agent is hired c. After the agent is fired d. None of the above
Why is free trade considered beneficial when consumers pay higher prices for products than they would have within a strictly domestic market?
a. Economists place more emphasis on producers and supply than they do on consumers and demand. b. Losses experienced within the domestic market are offset by gains within developing countries. c. The higher prices paid within the domestic market are temporary and usually decline in time. d. Negative effects experienced by consumers are offset by gains experienced by producers.
Popeye cannot eat enough free spinach. With this information, we know that Popeye's:
A. marginal utility for spinach is falling. B. total utility for spinach is falling. C. marginal utility for spinach never falls. D. total utility for spinach is always rising.