Question 14 Consider a monopoly using a two part tariff against consumers with downward sloping individual demand: (i) The monopolist will produce the efficient output. (ii) The monopolist will extract all surplus from consumers. a. (i) and (ii) are true only when consumers are homogenous. b. (i) holds only for homogenous consumers, but (ii) holds with hetrogeneous consumers as well. c. (ii) Holds only for homogeneous consumers, but (i) holds with hetrogeneous consumers as well. d. Even with homogeneous consumers, the monopolist will not always be able to assure that both (i) and (ii) hold.
Question 14 Consider a monopoly using a two part tariff against consumers with downward sloping individual demand: (i) The monopolist will produce the efficient output. (ii) The monopolist will extract all surplus from consumers. a. (i) and (ii) are true only when consumers are homogenous. b. (i) holds only for homogenous consumers, but (ii) holds with hetrogeneous consumers as well. c. (ii) Holds only for homogeneous consumers, but (i) holds with hetrogeneous consumers as well. d. Even with homogeneous consumers, the monopolist will not always be able to assure that both (i) and (ii) hold.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter9: Monopoly
Section: Chapter Questions
Problem 33P: Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the...
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Transcribed Image Text:Question 14
Consider a monopoly using a two part tariff against consumers with downward sloping individual demand:
(i) The monopolist will produce the efficient output.
(ii) The monopolist will extract all surplus from consumers.
a. (i) and (ii) are true only when consumers are homogenous.
b. (i) holds only for homogenous consumers, but (ii) holds with hetrogeneous consumers as well.
c. (ii) Holds only for homogeneous consumers, but (i) holds with hetrogeneous consumers as well.
Od. Even with homogeneous consumers, the monopolist will not always be able to assure that both (i) and (ii) hold.
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