A noisy monopoly that sells products under its own label for a high price and sells the virtually identical product with the same quality under a private label for a lower price engages in price discrimination. This allows the monopoly to capture a larger portion of the market and hold onto its monopoly power while still earning a profit. This behavior is not illegal, but it can reduce competition and harm consumers in the long run.

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A Noisy Monopoly

Question 32

Multiple Choice

A noisy monopoly

A) will be regulated by the Federal Trade Commission until it reduces its noise emissions.
B) sells products under its own label for a low price, and sells the virtually identical product with the same quality under a private label for a higher price.
C) sells products under its own label for a high price, and sells the virtually identical product with the same quality under a private label for a lower price.
D) leverages the Lemon Law to sell both good and poor quality goods for the same price.

Correct Answer: