Which of the following is true for a perfect price-discriminating monopoly?
A)P = MR for each unit sold.
B)P = ATC for each unit sold.
C)P = MC for each unit sold.
D)P MC for each unit sold.
E)P MR for each unit sold.

Question

Which of the following is true for a perfect price-discriminating monopoly?
A)P = MR for each unit sold.
B)P = ATC for each unit sold.
C)P = MC for each unit sold.
D)P > MC for each unit sold.
E)P > MR for each unit sold.

Quizplus · Accepted Answer

In a perfect price-discriminating monopoly, the monopolist charges each consumer the maximum they are willing to pay for each unit, effectively equating price (P) and marginal revenue (MR) for each unit sold. This allows the monopolist to capture all consumer surplus as producer surplus.

Which of the Following Is True for a Perfect Price-Discriminating