If a monopolist engages in price discrimination, it will
A)realize a smaller profit.
B)charge a higher price where individual demand is inelastic and a lower price where individual demand is elastic.
C)produce a smaller output than when it did not discriminate.
D)charge a competitive price to all its customers.

Question

Quizplus · Accepted Answer

Price discrimination allows a monopolist to charge different prices to different customers based on their willingness to pay. By charging a higher price where demand is inelastic and a lower price where demand is elastic, the monopolist can increase its profit by capturing more consumer surplus.

If a Monopolist Engages in Price Discrimination, It Will