a)
Condition to sell customers in a single-
a)
Answer to Problem 1CYU
False.
Explanation of Solution
Since
When monopolists sell the same good to a different customer for different prices then it is called price discrimination. And in single price discrimination, monopolists charge a high uniform price from every customer for the same good.
b)
Efficiency comparison between a price discriminating monopolist and a sing price monopolist.
b)
Answer to Problem 1CYU
False.
Explanation of Solution
Since a single-price monopolist charges a high uniform price which excludes more customers due to unaffordability, and a price-discriminating monopolist charges different prices with respect to affordability so a price-discriminating monopolist serves larger output than a single-price discriminating monopolist. Hence, there is inefficiency in a single-price monopolist. Thus, the given statement is false.
When monopolists sell the same good to a different customer for a different price then it is called price discrimination. And in single-price discrimination, monopolists charge a high uniform price from every customer for the same good. A price-discriminating monopolist covers a larger section of society than a single-price monopolist.
c)
Price charged by discriminating monopolists in a different market.
c)
Answer to Problem 1CYU
True.
Explanation of Solution
In price discriminating monopoly, a low price will be charged in the market having high
Price discrimination monopolist charges a different price for the same good from a different group of consumers according to the willingness to pay of customers. In a price-discriminating monopoly, the firm charges a different price in a different market with respect to the
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Chapter 63 Solutions
Krugman's Economics For The Ap® Course
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