Table 24.1 Monopoly Costs and Revenue
$$\begin{array} { | c | c | c | }
\hline \text { Quantity } & \text { Price } & \text { Total Cost } \
\hline 1 & \$ 500 & \$ 400 \
\hline 2 & \$ 450 & \$ 650 \
\hline 3 & \$ 400 & \$ 950 \
\hline 4 & \$ 350 & \$ 1,300 \
\hline 5 & \$ 300 & \$ 1,700 \
\hline
\end{array}$$ In Table 24.1,using the profit maximization rule,a monopolist that is able to practice price discrimination will charge
A)A price of $450.
B)A price of $400.
C)A price of $500.
D)Different prices to different customers.

Question

Table 24.1 Monopoly Costs and Revenue
$$\begin{array} { | c | c | c | } 
\hline \text { Quantity } & \text { Price } & \text { Total Cost } \
\hline 1 & \$ 500 & \$ 400 \
\hline 2 & \$ 450 & \$ 650 \
\hline 3 & \$ 400 & \$ 950 \
\hline 4 & \$ 350 & \$ 1,300 \
\hline 5 & \$ 300 & \$ 1,700 \
\hline
\end{array}$$ In Table 24.1,using the profit maximization rule,a monopolist that is able to practice price discrimination will charge
A)A price of $450.
B)A price of $400.
C)A price of $500.
D)Different prices to different customers.

Quizplus · Accepted Answer

A monopolist that is able to practice price discrimination will charge different prices to different customers based on their willingness to pay, rather than a single price for all units sold. This allows the monopolist to capture more consumer surplus as profit.

Table 241 Monopoly Costs and Revenue In Table 24