A monopolist finds that a person's demand for its product depends on the person's age. The inverse demand function of someone of age y can be written p = A(y) - q where A(Y) is an increasing function of y. The product cannot be resold from one buyer to another and the monopolist knows

the ages of its consumers. If the monopolist maximizes its profits:

a) older people will pay higher prices and purchase less of this product.

(b) older people will pay higher prices and purchase more of this product.

(c) older people will pay lower prices and purchase more of this product.

(d) everyone pays the same price but old people consume more.

(e) None of the above.

Could you please explain the answer? Thank you

Topic: Monopoly Behavior Difculty: Z '70 Correct Responses: 45 Discrimination Index: 0 Correct Answer: B 25.2 A monopolist nds that a person's demand for its product depends on the persons age. The inverse demand function of someone of age y, can be written p : A(y) *q where A[y) is an increasing function of y. The product cannot be resold from one buyer to another and the monopolist knows the ages of its consumers. if the monopolist maximizes its prots: (a) older people will pay higher prices and purchase less of this product. (1)) older people Will pay higher prices and purchase more of this product. (6) older people will pay lower prices and purchase more of this product. (d) everyone pays the same price but old people consume more. (6) None of the above