When a monopolist practices third-degree price discrimination,price will be:
A)the same in each market if resale is not possible.
B)higher in the market with the less elastic demand.
C)higher in the market with the higher average cost.
D)higher in the market will less number of consumers.

Question

Quizplus · Accepted Answer

Third-degree price discrimination involves charging different prices in different markets based on the elasticity of demand in each market. The monopolist will charge a higher price in the market with the less elastic demand because consumers in that market are less responsive to price changes and therefore willing to pay more.

When a Monopolist Practices Third-Degree Price Discrimination,price Will Be