A monopoly can practise price discrimination when it
A)can segment the market according to the different prices the consumers are willing to pay.
B)is a price taker.
C)has different marginal costs of production for different output levels.
D)has decreasing average variables cost.
E)produces a good with close substitutes.

Question

Quizplus · Accepted Answer

A monopoly can only practice price discrimination if it can identify and segment the market according to different prices that consumers are willing to pay. This allows the monopoly to charge higher prices to those who are willing to pay more, while still selling their product to those who are only willing to pay a lower price.

A Monopoly Can Practise Price Discrimination When It