Suppose a monopoly sells to two identifiably different types of customers, A and B, who are unable to practice arbitrage. The inverse demand curve for group A is PA = 10 - QA, and the inverse demand curve for group B is PB = 18 - QB. The monopolist is able to produce the good for either type of customer at a constant marginal cost of 2, and the monopolist has no fixed costs. If the monopolist
practices group price discrimination, the profit-maximizing prices charged to each type of customer are
A) PA = 6, and PB = 10.
B) PA = 4 and PB = 8.
C) PA = 10, and PB = 6.
D) PA = 8, and PB = 4.
A
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Fiscal policy moved toward expansion during the 1980s but toward restriction during the 1990s. How did these differences affect the economy?
a. The expansionary fiscal policy of the 1980s led to strong growth while the restrictive policy of the 1990s led to stagnation. b. The expansionary fiscal policy of the 1980s led to weaker growth than the restrictive policy of the 1990s. c. The expansionary fiscal policy of the 1980s generated more rapid growth than the restrictive policy of the 1990s. d. There is little evidence that the differences in fiscal policy between the two decades exerted much impact on either aggregate demand or real output.
Contrast the public interest theory of regulation with the legal cartel theory of regulation
What will be an ideal response?