question archive Price-discriminating, profit-maximizing monopolists charge higher prices to buyers who have more elastic demand curves
Price-discriminating, profit-maximizing monopolists charge higher prices to buyers who have more elastic demand curves
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Price-discriminating, profit-maximizing monopolists charge higher prices to buyers who have more elastic demand curves.
a. True
b. False
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- The answer is b. False.
The firm is in monopoly and practices price discrimination. More elastic demand curves mean the percentage change in quantity demanded is more than the percentages change in price. Hence, the monopoly firm will reduce the price to generate more demand and revenue as the elasticity is more than 1.
