A single-price monopolist with the same demand and cost conditions as a perfectly price-discriminating monopolist produces __________ output than the perfectly price-discriminating monopolist and __________ resource-allocative efficient.
A)less; is
B)less; is not
C)more; is
D)more; is not

Question

Quizplus · Accepted Answer

A single-price monopolist produces less output than a perfectly price-discriminating monopolist because it cannot capture all consumer surplus by charging different prices for each unit sold. This results in a deadweight loss, indicating that the single-price monopolist is not resource-allocatively efficient, unlike the perfectly price-discriminating monopolist who can achieve an efficient allocation of resources by equating price with marginal cost for every unit sold.

A Single-Price Monopolist with the Same Demand and Cost Conditions