Assume a monopolist can prevent resale of its product and it has complete information about each one of its customers. Even though each customer has a different demand curve, the seller can identify each customer's demand curve before a purchase takes place. It faces the inverse market demand of P = 160 - 10Q with marginal cost of MC = 10 + 5Q. The consumer surplus at the profit-maximizing result is $____.
A) 500
B) 400
C) 200
D) 0

Question

Quizplus · Accepted Answer

Given the monopolist can perfectly price discriminate (charge each customer exactly their willingness to pay), the consumer surplus would be 0 because the monopolist captures all the surplus by charging each consumer exactly their maximum willingness to pay.

Assume a Monopolist Can Prevent Resale of Its Product and It