Consider a monopolist who chooses to provide special discount to a group of customers with low willingness to pay—say, students, or seniors, or people living in a lower-income country. That kind of behavior cannot be explained by standard microeconomic theory, since a profit-maximizing monopolist would never want to provide any discounts.(a) True. (b) False.

Consider a monopolist who chooses to provide special discount to a group of customers with low willingness to pay—say, students, or seniors, or people living in a lower-income country. That kind of behavior cannot be explained by standard microeconomic theory, since a profit-maximizing monopolist would never want to provide any discounts.(a) True. (b) False.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter23: Monopoly

Section: Chapter Questions

Problem 2QP

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Which of the following best explains why the monopolist’s marginal revenue is less than the sales price?A) To sell more units, the monopolist must increase the price on all units sold.B) As the monopolist expands output, its total revenue always will decline.C) When the monopolist reduces price in order to sell more units, it must lower the price of units that could otherwise have been sold at a higher price.D) When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist.
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