With perfect price discrimination,a monopoly can extract the ________ price each customer is willing to pay and thereby obtain the entire ________ surplus.
A) maximum; consumer
B) minimum; producer
C) maximum; producer
D) minimum; consumer
E) None of the above answers are correct.

Question

Quizplus · Accepted Answer

Perfect price discrimination involves charging each customer the maximum price they are willing to pay for a product or service. This allows the monopolist to extract as much consumer surplus as possible and obtain the entire amount for themselves. Therefore, the correct answer is A, which states that with perfect price discrimination, a monopoly can extract the maximum price each customer is willing to pay and obtain the entire consumer surplus.

With Perfect Price Discrimination,a Monopoly Can Extract the ________ Price