Which is true of a price-discriminating pure monopolist?
A) P MR for the last unit sold.
B) Profit will be higher than in the nondiscriminating case.
C) The average price will be higher than in the nondiscriminating case.
D) Allocative inefficiency will be greater than in the nondiscriminating case.

Question

Which is true of a price-discriminating pure monopolist?
A) P > MR for the last unit sold.
B) Profit will be higher than in the nondiscriminating case.
C) The average price will be higher than in the nondiscriminating case.
D) Allocative inefficiency will be greater than in the nondiscriminating case.

Quizplus · Accepted Answer

Price discrimination allows the monopolist to charge different prices to different buyers according to their willingness to pay. This results in a higher total profit compared to a nondiscriminating monopolist which charges the same price to all buyers. The other options are not necessarily true for a price-discriminating monopolist.

Which Is True of a Price-Discriminating Pure Monopolist