32.A monopolist must choose between two points on its demand curve; it can sell

Question

32.A monopolist must choose between two points on its demand curve; it can sell 100 units for $3, or it can sell 160 for $2. Marginal revenue at 160th unit is__

a.$20

b.20 cents

c.$2

d.33 cents

e.$320

33.Which of the following is NOT an example of price discrimination?

a.offering senior citizen discounts at a restaurant

b.a super market that offers grocery coupons

c.a college with different tuition rates for in-state and out-of-state residents.

d.an electric utility company with different rate structure for business customers and residential customers.

e.charging the same price for a cash or credit card card purchase at a gas station.

Explanation / Answer

32. The correct option is d.33 cents . The formula for MR = (Change in TR/Change in Q or output)

Charging of same price for a cash or credit card purchase is not an example of price discrimination as there is no discrimination with regard to buyers who pay using cash or credit cards. Both payments are equally legible and are not relatively expensive or cheaper.

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