Exhibit 23-6 -Refer to Exhibit 23-6. Let C be the demand curve facing a perfectly price-discriminating monopolist and P₀ the price it charges for the last unit of X it sells. The marginal cost of the last unit A)is less than P₀. B)equals P₀. C)is greater than P₀. D)could be any of the above, depending on the shape of the marginal cost curve.

Question

Quizplus · Accepted Answer

A perfectly price-discriminating monopolist charges each consumer the maximum they are willing to pay for each unit, meaning the price of the last unit sold (P₀) equals the marginal cost of producing that unit. This ensures that the monopolist captures all consumer surplus as profit.

Exhibit 23-6 -Refer to Exhibit 23-6. Let C Be the Demand Curve