Segmenting a market allows monopolists to:
A) prevent entry.
B) have different average total costs.
C) engage in arbitrage.
D) sell to different demand curves.

Question

Quizplus · Accepted Answer

By segmenting a market, monopolists can identify different groups of consumers with varying levels of willingness to pay. This allows them to sell to different demand curves and charge different prices to each segment. This can increase profits by extracting more revenue from each group of consumers. Additionally, segmenting a market can make it more difficult for new firms to enter the market, which can help the monopolist maintain their market power.

Segmenting a Market Allows Monopolists To