A petrol station on a remote stretch of the Stuart Highway in the Northern Territory has a monopoly over the retail petrol market for hundreds of kilometres. The station decides not to price discriminate. As a result, all consumers will pay
A) the lowest price possible.
B) multiple prices.
C) a price that depends on their willingness to pay.
D) the highest price each consumer is willing to pay.
E) a single price.

Question

Quizplus · Accepted Answer

Since the petrol station decides not to price discriminate, it will charge all consumers the same single price. This price may not necessarily be the lowest or highest price, but it will be the same price for everyone.

A Petrol Station on a Remote Stretch of the Stuart