A discriminating monopolist is able to charge different prices in two different markets.If when the same price is charged in both markets, the quantity demanded in market 1 is always greater than the quantity demanded in market 2, then in order to maximize profits, the monopolist should charge a higher price in market 1 than in market 2.

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Quizplus · Accepted Answer

To maximize profits, a discriminating monopolist would charge a higher price in the market with the less elastic demand, not necessarily the market with the higher quantity demanded at the same price. Elasticity of demand, not just quantity demanded, determines how price changes affect total revenue in each market.

A Discriminating Monopolist Is Able to Charge Different Prices in Two