Compared to the situation in which it sets a single price,a monopoly that price discriminates ________ its economic profit and ________ its output.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
E) increases; does not change

Question

Quizplus · Accepted Answer

Price discrimination allows a monopoly to capture more consumer surplus, turning it into additional economic profit, and often leads to an increase in output as the firm adjusts prices and quantities to match different consumers' willingness to pay.

Compared to the Situation in Which It Sets a Single