Suppose we compare two monopolists with identical cost and demand conditions.Monopolist A charges a single price.Monopolist B engages in price discrimination,charging a different price for different units of the product.Which one of the following statements is correct?
A)A will produce less than B,resulting in smaller deadweight loss.
B)A and B will both produce the same amount.
C)B will generally produce more than A,resulting in less deadweight loss.
D)A will produce more than B,resulting in larger deadweight loss.
E)B will produce less than A,resulting in a larger deadweight loss.

Question

Quizplus · Accepted Answer

Monopolist B engages in price discrimination, which means that they are charging different prices for different units of the product to different groups of consumers. This allows monopolist B to capture more consumer surplus and increase their profits. Therefore, monopolist B will generally produce more than monopolist A, resulting in less deadweight loss.

Suppose We Compare Two Monopolists with Identical Cost and Demand