A monopoly exhibits resource-allocative efficiency if it
A)is a single-price monopolist.
B)is a perfectly price-discriminating monopolist.
C)engages in second-degree price discrimination.
D)engages in third-degree price discrimination.
E)all of the above

Question

Quizplus · Accepted Answer

A perfectly price-discriminating monopolist can achieve resource-allocative efficiency because it charges each consumer their maximum willingness to pay, thus equating price with marginal cost for every unit sold, which is the condition for resource-allocative efficiency.

A Monopoly Exhibits Resource-Allocative Efficiency If It