How is it logically possible for a monopolist to get different consumers to purchase different bundles on a menu (such as different sizes of coffee cups),and thereby achieve a form of price discrimination,even if the firm cannot observe the consumers' valuations directly?
A) different types of consumers have different tradeoffs between money and amounts of the good.
B) the monopolist can use a market-separation strategy.
C) social norms are powerful deterrents to lying about one's type.
D) this is impossible: if one bundle is preferred by one type, logically it will be preferred by all.

Question

Quizplus · Accepted Answer

Different types of consumers have different tradeoffs between money and amounts of the good, allowing the monopolist to offer a menu of options that cater to these varying preferences, thus achieving price discrimination.

How Is It Logically Possible for a Monopolist to Get