Exhibit 24-6

-Refer to Exhibit 24-6.Let C be the demand curve facing a perfectly price-discriminating monopolist and P₀ the price it charges for the last unit of X it sells.The marginal cost of the last unit

Question

Exhibit 24-6
Exhibit 24-6 -Refer to Exhibit 24-6.Let C be the demand curve facing a perfectly price-discriminating monopolist and P0 the price it charges for the last unit of X it sells.The marginal cost of the last unit A) is less than P0. B) equals P0. C) is greater than P0. D) could be any of the above, depending on the shape of the marginal cost curve.

Exhibit 24-6 -Refer to Exhibit 24-6.Let C be the demand curve facing a perfectly price-discriminating monopolist and P<sub>0</sub> the price it charges for the last unit of X it sells.The marginal cost of the last unit A) is less than P<sub>0</sub>. B) equals P<sub>0</sub>. C) is greater than P<sub>0</sub>. D) could be any of the above, depending on the shape of the marginal cost curve.

-Refer to Exhibit 24-6.Let C be the demand curve facing a perfectly price-discriminating monopolist and P₀ the price it charges for the last unit of X it sells.The marginal cost of the last unit

Quizplus · Accepted Answer

In a perfectly price-discriminating monopoly, the firm charges each customer the maximum amount they are willing to pay, which is equal to their individual demand curve. Therefore, the firm will sell every unit at a different price, and the last unit will be sold at the exact price that the consumer is willing to pay for it. This price is P₀. Since the monopolist is able to price discriminate perfectly, it can capture all consumer surplus and make a profit equal to the difference between the marginal cost and the price charged for each unit. Therefore, the marginal cost of producing the last unit must be equal to the price charged, which is P₀.

Exhibit 24-6 -Refer to Exhibit 24-6.Let C Be the Demand Curve Facing