A perfectly price-discriminating monopolist is able to
A)maximize profit and produce a socially optimal level of output.
B)maximize profit, but not produce a socially optimal level of output.
C)produce a socially optimal level of output, but not maximize profit.
D)exercise illegal preferences regarding the race and/or gender of its employees.

Question

Quizplus · Accepted Answer

A perfectly price-discriminating monopolist can charge each consumer the maximum they are willing to pay, thus capturing all consumer surplus as profit. This leads to an efficient allocation of resources, where the quantity produced and consumed matches the socially optimal level of output, as it eliminates deadweight loss.

A Perfectly Price-Discriminating Monopolist Is Able to