The practice of price discrimination is associated with pure monopoly because
A) it can be practiced whenever a firm's demand curve is downsloping.
B) monopolists have considerable ability to control output and price.
C) monopolists usually realize economies of scale.
D) most monopolists sell differentiated products.

Question

Quizplus · Accepted Answer

Pure monopolists have the ability to exercise control over both output and price, allowing them to engage in price discrimination. They can charge different prices to different groups of consumers based on differences in demand elasticity, allowing them to capture additional surplus in the market. Therefore, option B is the correct choice. Options A, C, and D are incorrect because they do not directly relate to the practice of price discrimination in a pure monopoly market.

The Practice of Price Discrimination Is Associated with Pure Monopoly