In the case of a perfectly price- discriminating monopoly, there is no
A) deadweight loss.
B) transfer of consumer surplus to the producer.
C) producer surplus.
D) economic profit.

Question

Quizplus · Accepted Answer

In a perfectly price-discriminating monopoly, the monopolist is able to charge each consumer the maximum they are willing to pay, thus capturing all possible consumer surplus and converting it into producer surplus. This process eliminates deadweight loss because the monopolist is able to sell to every consumer whose willingness to pay is above the cost of production, ensuring that all mutually beneficial trades are made.

In the Case of a Perfectly Price- Discriminating Monopoly, There