If a monopolist engages in perfect price discrimination, it will produce the same output level as a perfectly competitive industry.

Question

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If a monopolist engages in perfect price discrimination, it will charge each individual consumer the maximum amount they are willing to pay, which will result in the same price and output levels as a perfectly competitive industry. In other words, the monopolist will produce at the level where marginal cost equals the highest price any consumer is willing to pay, which is the same as the output level under perfect competition.

If a Monopolist Engages in Perfect Price Discrimination, It Will