For a perfect first-degree price discriminator, incremental revenue is:
A) greater than price if the demand curve is downward sloping.
B) the same as the marginal revenue curve if the firm is a non-discriminating monopolist.
C) equal to the price paid for each unit of output.
D) less than the marginal revenue for a non-discriminating monopolist.

Question

Quizplus · Accepted Answer

In a perfect first-degree price discriminator, the firm charges each unit of output at the maximum willingness to pay of the consumer. The incremental revenue is equal to the price paid for each unit of output. Therefore, the correct answer is C.

For a Perfect First-Degree Price Discriminator, Incremental Revenue Is