Question

A monopolist engages in price discrimination Question 11 options: A) by charging a higher price when marginal cost is lower. B) by charging a higher price to consumers whose demand is more elastic. C) by charging a lower price to consumers whose demand is more elastic. D) by charging the same price to all consumers.

Answer 1

C) by charging a lower price to consumers whose demand is more elastic.

Step-by-step explanation:

A monopoly is when there is only one firm operating in an industry. there is usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.

An example of a monopoly is an utility company

Price discrimination is when a seller sells the same good at different buyers in different markets.

A seller should sell a good at a higher price to the consumer with a less elastic demand and at a lower price to the consumer with the more elastic demand so as to maximise revenue.