If the monopolist can collect the total surplus from the market as higher profits, it must be engaged in perfect price discrimination.

Question

Quizplus · Accepted Answer

Perfect price discrimination occurs when a monopolist charges each consumer their individual maximum willingness to pay, thereby capturing the entire consumer surplus as profit. In this scenario, the monopolist would be able to collect the total surplus from the market as higher profits, indicating that it is engaged in perfect price discrimination.

If the Monopolist Can Collect the Total Surplus from the Market