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ID: 1122097 • Letter: #
Question
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38. a price-discriminating monopolist:
a.produces quality products only
b.does not sell products to minority groups
c.must have a very large operation
d.sells the same product in different markets at different prices
e.would not engage in dumping
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39.the price elasticities of demand for pharmaceuticals differs among the eight customer classes. If AARP has the most elastic demand of the eight customer classes, it will:
a.receive the greatest quantity of pharmaceuticals
b.receive the smallest quantity of pharmaceuticals
c.receive the pharmaceuticals at the lowest price
d.receive the pharmaceuticals at the highest price
e.be unable to obtain pharmaceuticals
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40.for effective price discrimination, the monopolist does not have to :
a.be earning a positive economic profit
b.be able to prevent the resale of the product by the original buyers
c.be a price maker
d.be able to separate buyers into different markets with different price elasticities
e.be a profit-maximizing firm
Explanation / Answer
(38) (d)
A price discriminating monopolist charges different price for the same grou from different customer segments.
(39) (c)
The higher (lower) the elasticity of demand for a segment, the lower (higher) the price charged by monopolist in that segment.
(40) (a)
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