A noisy monopoly

A. will be regulated by the Federal Trade Commission until it reduces its noise emissions.

B. sells products under its own label for a high price, and sells the virtually identical product with the same quality under a private label for a lower price.

C. sells products under its own label for a low price, and sells the virtually identical product with the same quality under a private label for a higher price.

D. leverages the Lemon Law to sell both good and poor quality goods for the same price.

Question

Business

Morgan Pacheco

31 July, 18:33

A noisy monopoly

A. will be regulated by the Federal Trade Commission until it reduces its noise emissions.

B. sells products under its own label for a high price, and sells the virtually identical product with the same quality under a private label for a lower price.

C. sells products under its own label for a low price, and sells the virtually identical product with the same quality under a private label for a higher price.

D. leverages the Lemon Law to sell both good and poor quality goods for the same price.

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Answers (1)

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Luka · Answer 1

C. sells products under its own label for a low price, and sells the virtually identical product with the same quality under a private label for a higher price.

Explanation:

A noisy monopolist practices price discrimination by selling the same product to different customer groups at different prices. For example, the product may be sold under its own label for a low price and also sold under a different private label to another group of customers for a higher price. Usually the higher paying customers believe that they are purchasing a better quality product and are willing to buy it at a higher price.