Refer to the information provided in Figure 13.11 below to answer the question(s) that follow. Figure 13.11
-Refer to Figure 13.11. Suppose a monopolist faces the demand and costs in the figure and is able to perfectly price discriminate. What is the societal loss from having a monopoly instead of a perfectly competitive industry supplying widgets?
A) $0
B) $4,000
C) $16,000
D) Indeterminate from the given information.

Question

Refer to the information provided in Figure 13.11 below to answer the question(s) that follow.  Figure 13.11
-Refer to Figure 13.11. Suppose a monopolist faces the demand and costs in the figure and is able to perfectly price discriminate. What is the societal loss from having a monopoly instead of a perfectly competitive industry supplying widgets?
A) $0 
B) $4,000 
C) $16,000 
D) Indeterminate from the given information.

Quizplus · Accepted Answer

When a monopolist is able to perfectly price discriminate, they sell each unit of output at the maximum price that consumers are willing to pay for that unit. This means they produce where marginal cost equals demand, just like in a perfectly competitive market, resulting in no deadweight loss and thus no societal loss from monopoly power.

Refer to the Information Provided in Figure 13