When a monopolist practices price discrimination,compared with a single-price monopolist,producer surplus will:
A)remain the same.
B)increase.
C)decrease.
D)increase initially and then return to its original level.

Question

Quizplus · Accepted Answer

When a monopolist practices price discrimination, it is able to charge different prices to different groups of consumers based on their willingness to pay. This allows the monopolist to capture the consumer surplus for themselves, increasing their profits. However, it also allows the monopolist to sell more units overall, which can increase producer surplus. Therefore, compared with a single-price monopolist, producer surplus will increase when a monopolist practices price discrimination.

When a Monopolist Practices Price Discrimination,compared with a Single-Price Monopolist,producer