A monopolist that price discriminates

Question

Quizplus · Accepted Answer

A monopolist that price discriminates is able to extract the maximum possible surplus from the market by charging different prices to different consumers based on their willingness to pay. This means that the monopolist can sell more output at a higher price to consumers with a higher willingness to pay, and less output at a lower price to consumers with a lower willingness to pay. As a result, the monopolist is able to produce the efficient level of output where marginal cost equals marginal revenue, and there is no deadweight loss. Therefore, choice C is the correct answer.

A Monopolist That Price Discriminates