Historical evidence suggests that monopolization of particular industries had led to lower prices. In such cases the monopolists had reduced profit to increase welfare

Zelda won the jackpot on a penny slot machine in Las Vegas and is given the following three options to receive her jackpot:

Option 1: $100,000 to be received right away, with four additional payments of $100,000 to be received each year for the next four years. Option 2: $250,000 to be received right away with two additional payments of $100,000 to be received each year for the next two years. Option 3: $400,000 to be received right away. Which option should Zelda choose if the interest rate is 8%? Would she choose the same option if the interest rate was 10%? Why?

For the practice of price discrimination to be successful, the monopoly must

a. face an imperfect resale market for its product. b. face similar demand curves for various markets. c. have similar costs among markets. d. have a downward sloping marginal cost curve.