-The above figure shows the market for a particular good.If the market is controlled by a perfect-price-discriminating monopoly,compared to a monopoly who charges a single price,the change in producer surplus is
A)B + D.
B)A.
C)A + C + E.
D)B + C + D + E.

Question

-The above figure shows the market for a particular good.If the market is controlled by a perfect-price-discriminating monopoly,compared to a monopoly who charges a single price,the change in producer surplus is
A)B + D. 
B)A. 
C)A + C + E. 
D)B + C + D + E.

Quizplus · Accepted Answer

A perfect-price-discriminating monopoly is able to charge each consumer the maximum they are willing to pay, thus capturing all consumer surplus (areas A, B, C, D, and E) as producer surplus. Compared to a single-price monopoly, which only captures areas A and B as producer surplus, the change in producer surplus includes the additional areas captured by perfect price discrimination, which are A, C, and E.

-The Above Figure Shows the Market for a Particular Good