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

Quizplus · Accepted Answer

In a perfect-price-discriminating monopoly, the producer can perfectly segment the market and charge each consumer the maximum they are willing to pay, capturing all consumer surplus and converting it into producer surplus. Therefore, the producer surplus includes all areas under the demand curve and above the supply curve, which are A, B, C, D, and E.

-The Above Figure Shows the Market for a Particular Good