Perfect price discrimination raises consumer surplus, expands market output, and eliminates any deadweight loss.

Question

Quizplus · Accepted Answer

Perfect price discrimination leads to each consumer paying the maximum price they are willing to pay for a good or service. This eliminates consumer surplus and can potentially reduce the size of the market by excluding customers who cannot afford to pay the high prices. Additionally, it may not eliminate deadweight loss entirely as there may still be some inefficiencies in the market caused by the high prices.

Perfect Price Discrimination Raises Consumer Surplus, Expands Market Output, and Eliminates