Use the figure below to answer the following question.

Figure 13.4.3
-Refer to Figure 13.4.3. The outcome is efficient if
A)the monopoly is able to perfectly price discriminate.
B)the price consumers pay is equal to average total cost.
C)the price consumers pay exceeds minimum average variable cost.
D)the quantity produced is 80 units.
E)the quantity produced is 20 units.

Question

Use the figure below to answer the following question.
  
Figure 13.4.3
-Refer to Figure 13.4.3. The outcome is efficient if
A)the monopoly is able to perfectly price discriminate. 
B)the price consumers pay is equal to average total cost. 
C)the price consumers pay exceeds minimum average variable cost. 
D)the quantity produced is 80 units. 
E)the quantity produced is 20 units.

Quizplus · Accepted Answer

When a monopoly perfectly price discriminates, it captures all consumer surplus, leading to an efficient outcome where the quantity produced is at the level where marginal cost equals marginal benefit.

Use the Figure Below to Answer the Following Question