A price discriminating monopoly charges A different prices to buyers for differe

Question

A price discriminating monopoly charges
A different prices to buyers for different products
B a different price to different types of buyers for the same product even though there are no differences in cost
C a different price to different buyers because the costs are different
D the same price to every buyer for the same product
E each customer a price that equals the marginal cost of serving that customer A price discriminating monopoly charges
A different prices to buyers for different products
B a different price to different types of buyers for the same product even though there are no differences in cost
C a different price to different buyers because the costs are different
D the same price to every buyer for the same product
E each customer a price that equals the marginal cost of serving that customer
A different prices to buyers for different products
B a different price to different types of buyers for the same product even though there are no differences in cost
C a different price to different buyers because the costs are different
D the same price to every buyer for the same product
E each customer a price that equals the marginal cost of serving that customer

Explanation / Answer

Answer)

B a different price to different types of buyers for the same product even though there are no differences in cost

Reason)

A discriminating monopoly, by using its monopolistic position, can do this as long as there are differences in price elasticity of demand between consumers or markets, and barriers to prevent consumers from making an arbitrage profit by selling among themselves. By catering to each type of customer the monopoly makes more profit.

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