Monopoly also practices price discrimination so that it charges less for the people who are unable...

Monopoly also practices price discrimination so that it charges less for the people who are unable to pay and charges more for the people who are both able to and Willing to pay.

Expert Solution

Monopoly also practices price discrimination so that charges less for the people who are unable to pay and charges more for the people who are both able to and willing to pay,

There is a single seller in a monopoly and so he has complete control over pricing and supply decisions in the market.The monopolist often charge different prices to different consumers for the same product,which is known as price discrimination.

There are three types of price discrimination namely,a)Personal price discrimination,b)Geographical price discrimination and c)Price discrimination on the basis of use.

Personal price discrimination refers to a practice where different prices are charged to different consumers,where people who are unable to pay are charged less and people who are both able to pay as well as willing to pay are charged more.It is based on the income of the consumer.

Examples of personal price discrimination are when lawyers,doctors,charge higher fees from rich people and lower fees are charged from poor people.

Rahul Sunny answered 1 year ago

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