If a monopoly can perfectly price discriminate,then its marginal revenue curve will be
A) the same as its demand curve.
B) the same as its supply curve.
C) the same as its marginal cost curve.
D) a vertical line at the profit-maximizing quantity of output.
E) undefined because it does not exist.

Question

Quizplus · Accepted Answer

When a monopoly can perfectly price discriminate, it charges each consumer the maximum they are willing to pay, effectively capturing the entire area under the demand curve as revenue. This means the marginal revenue, which is the additional revenue from selling one more unit, is exactly equal to the price that consumers are willing to pay for that unit, making the marginal revenue curve the same as the demand curve.

If a Monopoly Can Perfectly Price Discriminate,then Its Marginal Revenue