Question 14 Consider a monopoly using a two part tariff against consumers with downward sloping individual demand: (i) The monopolist will produce the efficient output. (ii) The monopolist will extract all surplus from consumers. a. (i) and (ii) are true only when consumers are homogenous. b. (i) holds only for homogenous consumers, but (ii) holds with hetrogeneous consumers as well. c. (ii) Holds only for homogeneous consumers, but (i) holds with hetrogeneous consumers as well. d. Even with homogeneous consumers, the monopolist will not always be able to assure that both (i) and (ii) hold.

Question 14 Consider a monopoly using a two part tariff against consumers with downward sloping individual demand: (i) The monopolist will produce the efficient output. (ii) The monopolist will extract all surplus from consumers. a. (i) and (ii) are true only when consumers are homogenous. b. (i) holds only for homogenous consumers, but (ii) holds with hetrogeneous consumers as well. c. (ii) Holds only for homogeneous consumers, but (i) holds with hetrogeneous consumers as well. d. Even with homogeneous consumers, the monopolist will not always be able to assure that both (i) and (ii) hold.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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