Skip to content
We use only essential cookies to keep you signed in and remember your preferences. See our Cookie Policy.
TestStop
MocksPracticeResourcesIndiaBlogPricing
Sign in
Questions › DSE › DSE 2005 › Q12
2 marks, −1Microeconomics › Monopoly and price discrimination › Multi-plant and multi-product monopolyModerateabout 2 min

DSE 2005 Question 12: Monopoly and price discrimination

For the setting with p=a−b(q1+q2)p=a-b(q_1+q_2)p=a−b(q1​+q2​), C1(q1)=q1C_1(q_1)=q_1C1​(q1​)=q1​ and C2(q2)=2q2C_2(q_2)=2q_2C2​(q2​)=2q2​: suppose Firm 111 takes over Firm 222 to become a monopolist. The new firm will

Tap an option to check your answer.

Answer and worked solution

Checking your account…

Plain-text version

For the setting with p=a-b(q₁+q₂), C₁(q₁)=q₁ and C₂(q₂)=2q₂: suppose Firm 1 takes over Firm 2 to become a monopolist. The new firm will (A) produce 2/3 of the output in Plant 1 and 1/3 of the output in Plant 2. (B) produce 1/3 of the output in Plant 1 and 2/3 of the output in Plant 2. (C) divide the output equally between the two plants. (D) produce nothing in Plant 2.

Also written as: For the setting with p=a-b(q_1+q_2), C_1(q_1)=q_1 and C_2(q_2)=2q_2: suppose Firm 1 takes over Firm 2 to become a monopolist. The new firm will

Monopoly and price discrimination has come up 128 times in 7 exams since 2004.

What this question tests

This question is on Multi-plant and multi-product monopoly, part of Monopoly and price discrimination in Microeconomics.

How a monopolist allocates output across plants, markets or products.

TestStop has 9 past-paper questions on this subtopic; the nearest in year are below.

  • IIT JAM 2021 · Q53A firm has two plants with TC₁ = 500 + 30Q₁ and TC₂ = 1500 + 20Q₂. Demand is Q^d = 150 - P/3. The value of…
Practise Monopoly and price discriminationMore on Multi-plant and multi-product monopoly

Similar questions from other papers

  • CUET-PG 2026 · Q31Given below are two statements: Assertion A: Monopoly power is the ability to set price above marginal cost and that the amount by which price exceeds marginal cost…
  • GATE 2026 · Q43The inverse demand function for the first book on \"Economics of Digital Public Infrastructure in India\" is given by p=200-0.002Q; where, p is the price of the book…
  • IIT JAM 2026 · Q14A monopolist sells different units of output for different prices, but every individual who buys the same quantity of the good pays the same price. It is known as price…
  • UGC-NET 2026 · Q17If AR = 15 - Q, then the value of Marginal Revenue will be:
  • GATE 2025 · Q42The inverse demand function for a monopolist is given by P = 100 - kQ where P is the unit price of the good, Q is the quantity and k is a constant. The cost function…

Question from the DSE 2005 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.