Which of the following statements about price discrimination is not true?
A) Price discrimination increases a monopolist's profits.
B) Price discrimination can raise economic welfare.
C) Price discrimination requires that the seller be able to separate buyers according to their willingness to pay.
D) Perfect price discrimination generates a deadweight loss.
E) For a monopolist to engage in price discrimination, buyers must be unable to engage in arbitrage.

Question

Quizplus · Accepted Answer

Perfect price discrimination, which means charging each buyer their exact willingness to pay, does not generate a deadweight loss. This is because the monopolist captures all gains from trade and produces at the efficient level of output.

Which of the Following Statements About Price Discrimination Is Not