Suppose quantity demanded is 2,000 when price is $10 and 3,000 when price is $5. If a monopolist who was initially charging a price of $10 discovers a way to price-discriminate, it will be able to increase revenue from $20,000 to:
A. $25,000 by charging consumers with less elastic demands only $5 and keeping the price for consumers with more elastic demands at $10.
B. $35,000 by charging consumers with less elastic demands only $5 and keeping the price for consumers with more elastic demands at $10.
C. $35,000 by charging consumers with more elastic demands only $5 and keeping the price for consumers with less elastic demands at $10.
D. $25,000 by charging consumers with more elastic demands only $5 and keeping the price for consumers with less elastic demands at $10.
Answer: D
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