A difference between a perfectly competitive market equilibrium and a perfect price discrimination equilibrium is that in a competitive market ________, whereas in perfect price discrimination ________.
A)all units are sold where p = MC; only the last unit sold is at p = MC
B)consumers receive some surplus; producers take all the surplus
C)consumers are better off; income is redistributed away from consumers to producers
D)All of the above.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, all units are sold where price equals marginal cost (p = MC), consumers receive some consumer surplus, and the outcome is generally considered efficient and beneficial for consumers. In perfect price discrimination, the seller charges each buyer their maximum willingness to pay, meaning only the last unit is sold at p = MC, producers capture all the surplus, effectively redistributing income from consumers to producers. Thus, all the statements A, B, and C correctly describe differences between perfectly competitive markets and perfect price discrimination scenarios.

A Difference Between a Perfectly Competitive Market Equilibrium and a Perfect