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Author Question: When can a monopolist practice price discrimination?[br][br][b][color=#566D7E]Question ... (Read 63 times)

Collmarie

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on: Jun 30, 2018
When can a monopolist practice price discrimination?

Question 2

The ability of a firm to charge different customers different prices is called _____.
 a. price ceiling
  b. price discrimination
  c. predatory pricing
  d. price flooring
  e. base point pricing


Natalie4ever

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Reply #1 on: Jun 30, 2018
Answer to Question 1

A monopolist can practice price discrimination when different buyers have different valuations of the product. When willingness to pay for a product varies across customers, a monopolist can discriminate profitably. The monopolist must also devise a way to separate its customers into groups with different demand elasticities, and must be able to prevent low-price customers from reselling to high-price ones.

Answer to Question 2

b


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