Multiple Choice
Suppose a monopoly sells to two identifiably different types of customers,A and B,who are unable to practice arbitrage.The inverse demand curve for group A is PA = 10 - QA,and the inverse demand curve for group B is PB = 18 - QB.The monopolist is able to produce the good for either type of customer at a constant marginal cost of 2,and the monopolist has no fixed costs.If the monopolist practices group price discrimination,the profit-maximizing prices charged to each type of customer are
A) PA = 6, and PB = 10.
B) PA = 4 and PB = 8.
C) PA = 10, and PB = 6.
D) PA = 8, and PB = 4.
Correct Answer:

Verified
Correct Answer:
Verified
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