Figure 15-15

-Refer to Figure 15-15.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to
A) $0.
B) $100.
C) $200.
D) $500.

Question

Figure 15-15
 
-Refer to Figure 15-15.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to
A) $0. 
B) $100. 
C) $200. 
D) $500.

Quizplus · Accepted Answer

If the monopoly firm perfectly price discriminates, it charges each consumer their maximum willingness to pay, and therefore produces at the efficient quantity (where marginal cost equals marginal revenue). Since there is no difference between the price charged and the marginal cost, there is no deadweight loss. Therefore, the answer is A) $0.

Figure 15-15 -Refer to Figure 15-15.If the Monopoly Firm Perfectly Price Discriminates,then