$\begin{array}{lll}
\text { Quantity } &\text {Price } &\text { Total cost }\
\hline1 & \$ 500 & \$ 400 \
2 & 450 & 650 \
3 & 400 & 950 \
4 & 350 & 1,300 \
5 & 300 & 1,700
\end{array}$
Table 24.1
Hypothetical Monopoly Costs and Revenue In Table 24.1, using the profit maximization rule, a monopolist that is able to practice price discrimination will charge
A) A price of $450.
B) A price of $400.
C) A price of $500.
D) Different prices to different customers.

Question

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different customers for the same product, based on their willingness to pay. The table suggests varying prices for different quantities, which a monopolist practicing price discrimination could exploit by charging each customer the maximum they are willing to pay for each unit.

Table 241 Hypothetical Monopoly Costs and Revenue in Table 24

Table 241
Hypothetical Monopoly Costs and Revenue in Table 24