Suppose that a price-discriminating monopolist divides its market into two segments.If the firm sells its product for a price of $42 in the market segment where demand is relatively less elastic, the price in the market segment whose customers' demand is more elastic will be
A)$42
B)greater than $42
C)less than $42
D)less than marginal revenue in that market segment
E)equal to marginal revenue in that market segment

Question

Quizplus · Accepted Answer

A price-discriminating monopolist charges a higher price in the market with less elastic demand and a lower price in the market with more elastic demand. Therefore, the price in the market with more elastic demand will be less than $42.

Suppose That a Price-Discriminating Monopolist Divides Its Market into Two