To maximize profits, the discriminating monopolist sells abroad rather than selling additional units at home because:

Question

Quizplus · Accepted Answer

If the monopolist were to sell additional units at home, it would have to lower the price in order to attract customers. This would lower the overall profit margin for the firm. On the other hand, if the monopolist decides to sell abroad, it would not have to lower its home price and can even charge a higher price to foreign customers. This would maximize profits for the firm.

To Maximize Profits, the Discriminating Monopolist Sells Abroad Rather Than