Demand Schedule Facing a
Perfectly Price Discriminating Firm

-Using the demand schedule in the above table, if the firm's marginal cost is constant at $3.00, output for a perfectly price discriminating monopolist is
A) 2 units.
B) 3 units.
C) 4 units.
D) 5 units.

Question

Demand Schedule Facing a
Perfectly Price Discriminating Firm
 
-Using the demand schedule in the above table, if the firm's marginal cost is constant at $3.00, output for a perfectly price discriminating monopolist is
A) 2 units. 
B) 3 units. 
C) 4 units. 
D) 5 units.

Quizplus · Accepted Answer

A perfectly price discriminating monopolist will produce up to the point where the price equals the marginal cost. If the marginal cost is $3.00, the monopolist will produce 5 units, as the price for the 5th unit is $3.00.