[amp_mcq option1=”to dispose of defective goods” option2=”to save on taxes” option3=”to take full advantage of differences in inelasticities of demand for his product in different markets\/uses” option4=”to feat another monopolist in the same product” correct=”option3″]<\/p>\n
The correct answer is C.<\/p>\n
A monopolist charges discriminating prices to take full advantage of differences in inelasticities of demand for his product in different markets\/uses. This means that the monopolist will charge a higher price to consumers who are less sensitive to price changes, and a lower price to consumers who are more sensitive to price changes. This allows the monopolist to extract more surplus from consumers, and therefore earn more profit.<\/p>\n
Option A is incorrect because a monopolist would not charge a lower price to dispose of defective goods. The monopolist would simply sell the defective goods at a lower price to a different market, or even give them away.<\/p>\n
Option B is incorrect because a monopolist does not need to charge discriminating prices to save on taxes. The monopolist can simply charge the same price to all consumers, and then deduct the cost of the taxes from its profits.<\/p>\n
Option D is incorrect because a monopolist does not need to charge discriminating prices to compete with another monopolist. The monopolist can simply charge the same price as the other monopolist, and then compete on other factors, such as quality or service.<\/p>\n","protected":false},"excerpt":{"rendered":"
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