clwww.cheggcom/homework ppose-monopolist-sels-product-men-women-f price-monopoli

Question

clwww.cheggcom/homework ppose-monopolist-sels-product-men-women-f price-monopolist-would-produce-q24699431 Suppose that a monopolist sells a product to men and women.Ifthe firm sets a single price, the monopolist at a price of $5.00 per unit. Suppose that at that price, the price elasticity of demand for men is -o 2.50. The monopolist is considering whether he should set discriminatory prices and asks for your advice. 75.and the price elasticity of demand for womenis -2.50 Suppose the monopolist is thinking about charging men a 10% higher price. If the monopolist does so, the quantity demanded by men would fall by Suppose the monopolist is thinking about charging women a 10% higher price. If the monopolist does so, the quantity demanded by women would fall by A11//201 Type here to

Explanation / Answer

1. Men:

Ed = % change in quantity demanded / % change in pric

- 0.75 = % change in quantity demanded / 10

% change in quantity demanded = - 0.75 x 10 = - 7.5

So, quantity demanded will fall by 7.5%

2. Women:

Ed = % change in quantity demanded / % change in pric

- 2.5 = % change in quantity demanded / 10

% change in quantity demanded = - 2.5 x 10 = - 25

So, quantity demanded will fall by 25%

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.