In the town of Woodland, California, there are many
only one eye doctor. Are senior citizens more likely to be offered discount prices for dental exams or for eye exams? Why?
Seniors are more likely to get a discount for
a dental exam because as a monopolist the eye doctor doesn't have to discount the price to get business.
an eye exam because a firm must have market power to price discriminate.
an eye exam because a firm must know reservation prices to price discriminate.
an eye exam because a monopoly will offer discounts to promote goodwill to avoid government regulation.
a dental exam because firms in a competitive market must fiercely compete for every customer.
the correct answer is: B. an eye exam... View the full answer