A perfectly price-discriminating monopolist is able to:
A)maximise profit, but not produce a level of output consistent with optimal social wellbeing
B)produce a level of output consistent with optimal social wellbeing, but not maximise profit
C)exercise illegal preferences over the gender of its employees
D)maximise profit and produce a level of output more consistent with optimal social wellbeing

Question

Quizplus · Accepted Answer

A perfectly price-discriminating monopolist charges each consumer the maximum they are willing to pay, thus capturing all consumer surplus as producer surplus. This leads to an efficient allocation of resources, where the quantity produced is more consistent with the socially optimal level, and the monopolist maximizes profit.

A Perfectly Price-Discriminating Monopolist Is Able To