Suppose that a monopolist is considering two different pricing schemes: offering the good at $100 per unit with a $10 rebate coupon,or just charging a flat $90 per unit.His economic consultant would advise him to
A) charge the $90 price.
B) charge the $100 price and "misplace" most of the rebate coupons.
C) charge the $100 price because less than 100% of the buyers will mail in the rebate.
D) do either;the impact will be the same.
E) charge the $90 price because most consumers ignore rebate offers.

Question

Quizplus · Accepted Answer

Rebate coupons often go unclaimed, meaning that the effective price paid by many consumers will be $100 rather than $90, increasing the monopolist's revenue.

Suppose That a Monopolist Is Considering Two Different Pricing Schemes