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In the Small Country of Talisman, the Liquor Industry Is

Question 43

Multiple Choice

In the small country of Talisman, the liquor industry is monopolized by a single producer Best Drinks Inc.Best Drinks charges high-end customers like 5-star hotels a much higher price than it charges local pubs.This discrimination is possible only if:


A) price discrimination is legal in Talisman.
B) we assume Best Drinks can prevent pub owners from buying liquor and selling it to 5-star hotels.
C) consumers in Talisman have similar price elasticities of demand for liquor.
D) we assume Best Drinks is a natural monopoly.

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