(Figure: Third-Degree Monopolist) The monopolist in the graph has market power; he can separate the market into different consumer groups based on their elasticities of demand, and he can prevent arbitrage. The monopolist has a marginal cost of $10. If he practices third-degree price discrimination, he will charge the first group _____ and the second group _____.

A) $27.50; $12.50
B) $30; $17.50
C) $20; $20
D) $10; $10

Question

(Figure: Third-Degree Monopolist) The monopolist in the graph has market power; he can separate the market into different consumer groups based on their elasticities of demand, and he can prevent arbitrage. The monopolist has a marginal cost of $10. If he practices third-degree price discrimination, he will charge the first group _____ and the second group _____.

A) $27.50; $12.50 
B) $30; $17.50 
C) $20; $20 
D) $10; $10

Quizplus · Accepted Answer

The Answer of (Figure: Third-Degree Monopolist) The monopolist in the graph has market power; he can separate the market into different consumer groups based on their elasticities of demand, and he can prevent arbitrage. The monopolist has a marginal cost of $10. If he practices third-degree price discrimination, he will charge the first group _____ and the second group _____.

A) $27.50; $12.50 
B) $30; $17.50 
C) $20; $20 
D) $10; $10

(Figure: Third-Degree Monopolist) the Monopolist in the Graph Has Market