Question 26
Market StructuresA discriminatory monopoly is characterized by
- A.a common elasticity in different markets
- B.different elasticities in different markets
- C.a finite elasticity in all markets
- D.zero elasticity in all markets.
Show the answer and explanation
Answer: B (different elasticities in different markets)
Explanation
A monopolist can charge different prices only if demand elasticity differs between markets: a higher price where demand is inelastic.