Which of the following statements is TRUE?
A) Arbitrage makes it easier for firms to set different prices in different markets.
B) To maximize profits, monopolists will always set a higher price in markets with more inelastic demand curves.
C) Monopolists typically prefer not to segment markets.
D) Even if demand curves are identical, it is still typically profit maximizing for monopolists to charge different prices in different markets.

Question

Quizplus · Accepted Answer

Monopolists will set higher prices in markets with more inelastic demand because consumers are less sensitive to price changes, allowing the monopolist to increase prices without losing many sales, thus maximizing profits.

Which of the Following Statements Is TRUE