If a monopolist is able to perfectly price discriminate,which outcome results
A)Consumer surplus is always increased.
B)Total surplus is always decreased.
C)Consumer surplus and deadweight losses are transformed into monopoly profits.
D)The price effect dominates the output effect on monopoly revenue.

Question

Quizplus · Accepted Answer

If a monopolist is able to perfectly price discriminate, they can charge each individual consumer the maximum price they are willing to pay for the product. In this scenario, consumer surplus is reduced to zero because consumers are paying the exact amount they are willing to pay without any surplus. Additionally, deadweight losses are eliminated and the monopolist is able to capture all of the surplus in the form of monopoly profits. Therefore, choice C is the correct answer.

If a Monopolist Is Able to Perfectly Price Discriminate,which Outcome