If the local phone company, a monopolist, were to perfectly price-discriminate, it would reduce total surplus.

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Perfect price discrimination would result in each consumer paying the maximum amount they are willing to pay for the service, which would increase the monopolist's profits but not necessarily reduce total surplus. However, it can be argued that perfect price discrimination may decrease consumer surplus and redistribute it to the monopolist.

If the Local Phone Company, a Monopolist, Were to Perfectly