Consider a monopoly's first-degree price discrimination. With first-degree price discrimination, producer surplus is lower than with uniform pricing.

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With first-degree price discrimination, the monopolist charges each customer their maximum willingness to pay, resulting in no consumer surplus, but also resulting in the highest possible producer surplus. Therefore, producer surplus is actually higher under first-degree price discrimination compared to uniform pricing. With first-degree price discrimination, the monopolist charges each customer their willingness to pay, which maximizes total surplus and eliminates deadweight loss. As a result, the monopolist is able to capture all of the consumer surplus and convert it into additional profit, increasing producer surplus. Therefore, producer surplus is higher under first-degree price discrimination than with uniform pricing.

Consider a Monopoly's First-Degree Price Discrimination