How can a monopolist 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 separate the types into different markets.
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

By offering different bundle sizes, the monopolist can attract different types of consumers who have different preferences for the amount of the good versus the price. For example, some consumers may prefer a smaller cup of coffee at a lower price, while others may be willing to pay more for a larger size. This allows the monopolist to indirectly price discriminate based on the bundle size without directly observing each consumer's valuation.

How Can a Monopolist Get Different Consumers to Purchase Different