A price-discriminating monopolist sells in two separate markets such that goods sold in one market are never resold in the other.It charges p1 = $4 in one market and p2 =$8 in the other market.At these prices,the price elasticity in the first market is -1.90 and the price elasticity in the second market is 20.30.Which of the following actions is sure to raise the monopolist's profits?

A) Raise p2. B) Raise p1 and lower p2. C) Lower p2. D) Raise both p1 and p2. E) Raise p2 and lower p1. A) Raise p2. B) Raise p1 and lower p2. C) Lower p2. D) Raise both p1 and p2. E) Raise p2 and lower p1.

Exam 26:Monopoly Behavior-Part A

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Miron Floren,of Lawrence Welk Show fame,now tours the country performing at accordion concerts.A careful analysis of demand for tickets to Mr.Floren's concerts reveals a strange segmentation in the market.Demand for tickets by senior citizens is described by Q₀ =500P ^- ^3/2 while demand by those under 65 years old is Q_y =50P ^- ⁵.If the marginal cost of a ticket is $3,how should tickets to Mr.Floren's concerts be priced to maximize profits?

(Multiple Choice)

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Question 21

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.

(True/False)

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Question 22

Miron Floren,of Lawrence Welk Show fame,now tours the country performing at accordion concerts.A careful analysis of demand for tickets to Mr.Floren's concerts reveals a strange segmentation in the market.Demand for tickets by senior citizens is described by Q₀ = 500P ^- ^3/2 while demand by those under 65 years old is Q_y=50P ^- ⁴.If the marginal cost of a ticket is $3,how should tickets to Mr.Floren's concerts be priced to maximize profits?

(Multiple Choice)

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Question 23

A monopolist is able to practice third-degree price discrimination between two markets.The demand function in the first market is q = 500 -2p and the demand function in the second market is q =1,500- 6p.To maximize his profits,he should

(Multiple Choice)

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Question 24

A price-discriminating monopolist charges p₁ in market 1 and p₂ in market 2.If p₁ $\gt$ p₂,the absolute value of the price elasticity in market 1 at price p₁ must be smaller than the absolute value of the price elasticity in market 2 at price p₂.

(True/False)

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Question 25

Miron Floren,of Lawrence Welk Show fame,now tours the country performing at accordion concerts.A careful analysis of demand for tickets to Mr.Floren's concerts reveals a strange segmentation in the market.Demand for tickets by senior citizens is described by Q₀ =500P ^- ^3/2 while demand by those under 65 years old is Q_y =50P ^- ⁴.If the marginal cost of a ticket is $4,how should tickets to Mr.Floren's concerts be priced to maximize profits?

(Multiple Choice)

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Question 26

A monopolist who is able to practice third-degree price discrimination charges a higher price in the market that is more elastic.

(True/False)

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Question 27

Roach Motors has a monopoly on used cars in Enigma,Ohio.By installing secret microphones in the showroom,the friendly salespersons at Roach are able to learn each customer's willingness to pay and can therefore practice first-degree price discrimination,extracting from each customer his entire consumer's surplus.The inverse demand function for cars in Enigma is P = 2,000 -10Q.Roach Motors purchases its stock of used cars at an auction in Cleveland for $500 each.Roach motors will

(Multiple Choice)

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Question 28

A price-discriminating monopolist sells in two separate markets such that goods sold in one market are never resold in the other.It charges p₁ = $4 in one market and p₂ =$8 in the other market.At these prices,the price elasticity in the first market is -1.90 and the price elasticity in the second market is 20.30.Which of the following actions is sure to raise the monopolist's profits?

(Multiple Choice)

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Question 29

Roach Motors has a monopoly on used cars in Enigma,Ohio.By installing secret microphones in the showroom,the friendly salespersons at Roach are able to learn each customer's willingness to pay and can therefore practice first-degree price discrimination,extracting from each customer his entire consumer's surplus.The inverse demand function for cars in Enigma is P = 2,000-10Q.Roach Motors purchases its stock of used cars at an auction in Cleveland for $600 each.Roach motors will

(Multiple Choice)

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Question 30

A careful analysis of demand for Bubbles in Strasburg,North Dakota,reveals a strange segmentation in the market.(Recall Bubbles is the beverage which produces an unexplained craving for Lawrence Welk's music.It is produced by the process Q =min{R/4,W },where R is the number of pulverized Lawrence Welk records and W is gallons of North Dakota well water.P_R= $1,P_W =$4. )If demand for Bubbles by senior citizens is described by Q₀ =500P ^- ^3/2 while demand by those under 65 years old is Q_y = 50P ^- ⁴,how should Bubbles be priced to maximize profits?

(Multiple Choice)

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Question 31

A monopolist sells in two markets.The demand curve for her product is given by p₁ = 141 - 3x₁ in the first market and p₂ =115 -2x₂ in the second market,where x_i is the quantity sold in market i and p_i is the price charged in market i.She has a constant marginal cost of production,c = 3,and no fixed costs.She can charge different prices in the two markets.What is the profit-maximizing combination of quantities for this monopolist?

(Multiple Choice)

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Question 32

A monopolist sells in two markets.The demand curve for her product is given by p₁ =165 - 3x₁ in the first market and p₂=233 - 4x₂ in the second market,where x_i is the quantity sold in market i and p_i is the price charged in market i.She has a constant marginal cost of production,c = 9,and no fixed costs.She can charge different prices in the two markets.What is the profit-maximizing combination of quantities for this monopolist?

(Multiple Choice)

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Question 33

Showing 21 - 33 of 33

Exam 26:Monopoly Behavior-Part A

A monopolist is able to practice third-degree price discrimination between two markets.The demand function in the first market is q = 500 -2p and the demand function in the second market is q =1,500- 6p.To maximize his profits,he should

A price-discriminating monopolist charges p1 in market 1 and p2 in market 2.If p1 >\gt> p2,the absolute value of the price elasticity in market 1 at price p1 must be smaller than the absolute value of the price elasticity in market 2 at price p2.

A monopolist who is able to practice third-degree price discrimination charges a higher price in the market that is more elastic.

Demand-Part A

Revealed Preference-Part A

Revealed Preference-Part B

Slutsky Equation-Part A

Slutsky Equation-Part B

Buying and Selling-Part A

Buying and Selling-Part B

Intertemporal Choice-Part A

Intertemporal Choice-Part B

Asset Markets-Part A

Asset Markets-Part B

Uncertainty-Part A

Uncertainty-Part B

Risky Assets-Part A

Risky Assets-Part B

Consumers Surplus-Part A

Consumers Surplus-Part B

Market Demand-Part A

Market Demand-Part B

Equilibrium-Part A

Equilibrium-Part B

Auctions-Part A

Auctions-Part B

Technology-Part A

Technology-Part B

Profit Maximization-Part A

Profit Maximization-Part B

Cost Minimization-Part A

Cost Minimization-Part B

Cost Curves-Part A

Cost Curves-Part B

Firm Supply-Part A

Firm Supply-Part B

Industry Supply-Part A

Industry Supply-Part B

Monopoly-Part A

Monopoly-Part B

Monopoly Behavior-Part B

Factor Markets-Part A

Factor Markets-Part B

Oligopoly-Part A

Oligopoly-Part B

Game Theory-Part A

Game Theory-Part B

Game Applications-Part A

Game Applications-Part B

Behavioral Economics-Part A

Exchange-Part A

Exchange-Part B

Production-Part A

Production-Part B

Welfare-Part A

Welfare-Part B

Externalities-Part A

Externalities-Part B

Information Technology-Part A

Information Technology-Part B

Public Goods-Part A

Public Goods-Part B

Asymmetric Information-Part A

Asymmetric Information-Part B

Filters

A price-discriminating monopolist charges p₁ in market 1 and p₂ in market 2.If p₁ $\gt$ p₂,the absolute value of the price elasticity in market 1 at price p₁ must be smaller than the absolute value of the price elasticity in market 2 at price p₂.