The correct answer is: A. Different elasticity of demand.
Differential monopoly is a type of monopoly where a monopolist can charge different prices for the same good or service in different markets. This is possible because the demand for the good or service is not the same in all markets. In some markets, the demand may be more elastic, meaning that consumers are more sensitive to price changes. In other markets, the demand may be more inelastic, meaning that consumers are less sensitive to price changes.
A monopolist can charge a higher price in a market with inelastic demand than in a market with elastic demand. This is because consumers in the market with inelastic demand are less likely to switch to a different good or service if the price goes up.
Differential monopoly can lead to higher prices for consumers and lower output in the market. This is because the monopolist is able to extract more surplus from consumers.
Here is a brief explanation of each option:
- Option A: Different elasticity of demand. This is the correct answer because differential monopoly is only possible when there are two markets with different elasticities of demand.
- Option B: Same elasticity of demand. This is not the correct answer because differential monopoly is not possible when there are two markets with the same elasticity of demand.
- Option C: Demand inelastic. This is not the correct answer because differential monopoly can occur in markets with both elastic and inelastic demand.
- Option D: None of these. This is not the correct answer because option A is the only option that is consistent with the definition of differential monopoly.