A single-price monopoly

Question

Quizplus · Accepted Answer

A single-price monopoly charges the same price to all consumers and does not differentiate based on willingness to pay. This results in some consumers being priced out and the monopoly producing less output than it would under perfect price discrimination. Option A is incorrect as the monopoly does not charge the lowest price that consumers want to pay. Option C is incorrect as some consumer surplus may still exist for those who are able and willing to pay the monopoly price. Option D is incorrect as the deadweight loss is larger in a single-price monopoly compared to perfect price discrimination.

A Single-Price Monopoly