Question

Absent an ability to price discriminate, if a monopoly wants to sell more output, it must...

Absent an ability to price discriminate, if a monopoly wants to sell more output, it must

a.

lower its price
b.

obtain government permission
c.

increase barriers to entry
d.

raise its price
e.

negate its patent protection
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Homework Answers

Answer #1

Answer to the above-mentioned question is an option (a) that is lower its price.

Meaning of price discrimination.

It is a sort of master plan for selling which acts as applying different charges to the customer for the same goods or services.

In simple words, the shopkeeper sells the particular goods to the purchaser at the most maximum price as the customer will pay.  

Meaning of monopoly.

It is a structure of the market which is distinguished by the soul seller or the firm who is selling the uniform goods or proving the services. So in such type of structure, the shopkeeper the owner faces zero competition .

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