With first-degree price discrimination, the marginal revenue curve:
A)is below the demand curve, with slope equal to twice the slope of demand.
B)is above the demand curve.
C)is the same as the demand curve.
D)is below the demand curve, with slope equal to one-half the slope of demand.

Question

Quizplus · Accepted Answer

In first-degree price discrimination, the seller charges each consumer their maximum willingness to pay, effectively capturing the entire area under the demand curve as producer surplus. This means the marginal revenue curve coincides with the demand curve because each additional unit is sold at its own price, without affecting the prices of other units sold.

With First-Degree Price Discrimination, the Marginal Revenue Curve