Monopoly profit will _____ when a monopolist goes from single-price monopoly to perfect price discrimination.
A)remain the same
B)increase
C)decrease
D)initially increase and then return to its original level

Question

Quizplus · Accepted Answer

When a monopolist practices perfect price discrimination, they are able to charge each individual buyer their willingness to pay, which maximizes the monopolist's profits. This means that the monopolist is able to extract more surplus from each buyer, resulting in higher profits overall compared to single-price monopolies. Therefore, profit will increase when a monopolist goes from single-price monopoly to perfect price discrimination.

Monopoly Profit Will _____ When a Monopolist Goes from Single-Price