When price discrimination does not increase output,it increases a monopoly's profits because it ________.

Question

Quizplus · Accepted Answer

Price discrimination allows the firm to capture some consumer surplus by charging a higher price to those who are willing to pay more. This results in increased profits for the monopoly. However, it does not increase output as the monopoly is still able to sell the same quantity of goods at a higher price. The other options do not fully explain why price discrimination would increase profits without increasing output.

When Price Discrimination Does Not Increase Output,it Increases a Monopoly's