The correct answer is C. different elasticities of demand.
A discriminating monopoly is a monopoly that can charge different prices to different consumers for the same good or service. This is possible if the monopoly can prevent consumers from reselling the good or service to each other.
The monopoly can charge different prices to different consumers if the consumers have different elasticities of demand. Elasticity of demand is a measure of how responsive consumers are to changes in price. If consumers have different elasticities of demand, the monopoly can charge a higher price to consumers with inelastic demand and a lower price to consumers with elastic demand.
For example, suppose a monopoly has two markets, Market A and Market B. In Market A, the demand for the monopoly’s good is inelastic. This means that consumers in Market A are not very responsive to changes in price. In Market B, the demand for the monopoly’s good is elastic. This means that consumers in Market B are very responsive to changes in price.
The monopoly can charge a higher price in Market A than in Market B. This is because consumers in Market A are not very responsive to changes in price. They will still buy the good even if the price is high. Consumers in Market B, on the other hand, are very responsive to changes in price. If the price is too high, they will not buy the good.
By charging different prices in different markets, the monopoly can increase its profits.