The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-A price discriminating monopolist charges a very high price to the consumers with high price elasticity of demand.

Question

The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
  D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-A price discriminating monopolist charges a very high price to the consumers with high price elasticity of demand.

Quizplus · Accepted Answer

A price discriminating monopolist charges different prices to different groups of consumers based on their price elasticity of demand. The monopolist charges a high price to the group with low price elasticity of demand and a lower price to the group with high price elasticity of demand. Therefore, the statement in option A is false.

The Figure Given Below Shows the Cost and Revenue Curves