In the absence of externalities, which of the following will produce the efficient quantity for society?

Question

Quizplus · Accepted Answer

A monopoly that practices perfect price discrimination will produce the efficient quantity for society because it charges each consumer their maximum willingness to pay and produces until marginal cost equals marginal revenue, which is the socially efficient output level. Without externalities, there is no market failure caused by market power, and a monopoly practicing perfect price discrimination will allocate resources efficiently.

In the Absence of Externalities, Which of the Following Will