Author Question: In the small country of Talisman, the liquor industry is monopolized by a single producer Best ... (Read 94 times)

storky111 · **on:** Jun 30, 2018

In the small country of Talisman, the liquor industry is monopolized by a single producer Best Drinks Inc Best Drinks charges high-end customers like 5-star hotels a much higher price than it charges local pubs. This discrimination is possible only if:
a. price discrimination is legal in Talisman.
b. we assume Best Drinks can prevent pub owners from buying liquor and selling it to 5-star hotels.
c. consumers in Talisman have similar price elasticities of demand for liquor.
d. we assume Best Drinks is a natural monopoly.

Question 2

If a monopolist is producing at the profit-maximizing level of output, what price will it charge?
a. The price given by the marginal-revenue curve at that level of output.
b. The price given by the marginal-cost curve at that level of output.
c. The price given by the average-cost curve at that level of output.
d. The price given by the average-revenue curve at that level of output.
e. The price given by the total revenue curve at that level of output.