Question

For a single price monopolist, marginal revenue decreases because:

Question 1 options:

	in order to sell more quantity, price must increase for all previous quantity.
	in order to sell more quantity, price must decrease for all previous quantity.
	the monopoly can sell any quantity it wants without lowering its price.

In perfect price discrimination:

Question 2 options:

	firms are perfectly competitive.
	each customer is charged their exact willingness to pay for each quantity.
	each customer is charged the exact same price.

What part of the graph is different between single price monopoly and a price discriminating monopoly?

Question 3 options:

	demand.
	marginal revenue.
	marginal cost.

In perfect price discrimination, a firm must lower its price for all customers in order to sell an additional quantity.

Question 4 options:

	True
	False

Answer 1

1.For a single price monopolist, marginal revenue decreases because:in order to sell more quantity, price must decrease for all previous quantity.

In a monopoly there happens a price effect. The price must be reduced inorder to sell additional output. So the marginal revenue obtained will be low than the price, because less revenue is got for previous units as well.

2.In perfect price discrimination:each customer is charged their exact willingness to pay for each quantity.

Price discrimination is a situation where customers are charged their entire willingness in order to pay.

3.The part of graph different between single price monopoly and a price discriminating monopoly is Marginal Revenue .

A single-price monopoly  firm is that sell each unit of output for the same price to all the  customers while price-discriminating monopoly is the firm selling different units of a good or service at differing prices.

4.False

All prices charged in price discrimination are higher than the equilibrium price which is the general price paid by every customer in a perfectly-competitive market.

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