(Figure: Multiple-Price Monopolist) The monopolist in the graph has market power; she can separate the market into different consumer groups based on their elasticities of demand, and she can prevent arbitrage. The monopolist has a marginal cost of $10. If she plans to charge $40 for the first 2,500 units; $30 for the next 2,500 units; $20 for the next 2,500 units; and $10 for the final 2,500 units, this is an example of _____ price discrimination, and the producer surplus for the monopolist would be _____.

A) third-degree; $400,000
B) second-degree; $200,000
C) third-degree; $200,000
D) second-degree; $150,000

Question

(Figure: Multiple-Price Monopolist) The monopolist in the graph has market power; she can separate the market into different consumer groups based on their elasticities of demand, and she can prevent arbitrage. The monopolist has a marginal cost of $10. If she plans to charge $40 for the first 2,500 units; $30 for the next 2,500 units; $20 for the next 2,500 units; and $10 for the final 2,500 units, this is an example of _____ price discrimination, and the producer surplus for the monopolist would be _____.

A) third-degree; $400,000 
B) second-degree; $200,000 
C) third-degree; $200,000 
D) second-degree; $150,000

Quizplus · Accepted Answer

The Answer of (Figure: Multiple-Price Monopolist) The monopolist in the graph has market power; she can separate the market into different consumer groups based on their elasticities of demand, and she can prevent arbitrage. The monopolist has a marginal cost of $10. If she plans to charge $40 for the first 2,500 units; $30 for the next 2,500 units; $20 for the next 2,500 units; and $10 for the final 2,500 units, this is an example of _____ price discrimination, and the producer surplus for the monopolist would be _____.

A) third-degree; $400,000 
B) second-degree; $200,000 
C) third-degree; $200,000 
D) second-degree; $150,000

(Figure: Multiple-Price Monopolist) the Monopolist in the Graph Has Market