-The above figure shows the market for a particular good.If the market is controlled by a perfect-price-discriminating monopoly,social welfare equals
A) A.
B) A + B + C.
C) A + B + C + D + E.
D) zero.

Question

-The above figure shows the market for a particular good.If the market is controlled by a perfect-price-discriminating monopoly,social welfare equals
A) A. 
B) A + B + C. 
C) A + B + C + D + E. 
D) zero.

Quizplus · Accepted Answer

In a perfect-price-discriminating monopoly, the monopolist is able to charge each consumer the maximum they are willing to pay, effectively converting all consumer surplus and deadweight loss into producer surplus. This means areas A, B, C, D, and E, which represent the total welfare (consumer surplus + producer surplus) in a competitive market, are all captured by the monopolist, resulting in the same total welfare as in a competitive market, but with no consumer surplus.

-The Above Figure Shows the Market for a Particular Good