Tobac Co.is a monopolist in cigarette market in Nicotiana Republic,where the U.S.dollar is used as the official currency.The firm faces the demand curve shown below.The firm has a constant marginal cost of $2.00 per pack.If Tobac Co.could successfully carry out the first-degree (or perfect) price discrimination,the social surplus would ________ and the consumer surplus would be ________.
A) not be maximized; $112.5 million
B) not be maximized; $0
C) be maximized; $0
D) be maximized; $450 million
Correct Answer:
Verified
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