A perfect price discriminating monopoly
A)captures all consumer surplus.
B)creates deadweight loss.
C)increases market inefficiency.
D)decreases total welfare.

Question

Quizplus · Accepted Answer

A perfect price discriminating monopoly is able to charge each individual consumer the maximum amount they are willing to pay for a product, thus capturing all consumer surplus. This results in higher profits for the monopolist, but does not create deadweight loss or increase market inefficiency, and may actually increase total welfare if the increased profits are reinvested in improving the quality of the product or expanding production.

A Perfect Price Discriminating Monopoly