Table 15-6
Dreher's Designer Shirt Company,a monopolist,has the following cost and revenue information.Assume that Dreher's is able to engage in perfect price discrimination.

-Refer to Table 15-6.If the monopolist can engage in perfect price discrimination,what is the total revenue when 7 shirts are sold?

Question

Table 15-6
Dreher's Designer Shirt Company,a monopolist,has the following cost and revenue information.Assume that Dreher's is able to engage in perfect price discrimination.
 
-Refer to Table 15-6.If the monopolist can engage in perfect price discrimination,what is the total revenue when 7 shirts are sold?

Quizplus · Accepted Answer

Under perfect price discrimination, the monopolist charges each consumer exactly their willingness to pay. From the table, we can see that each consumer has a different willingness to pay, ranging from $110 to $190. The monopolist can charge each consumer their maximum willingness to pay, and as a result, total revenue in this case would be the sum of the individual revenues:

(1) $190
(2) $180
(3) $170
(4) $160
(5) $150
(6) $140
(7) $110

Total revenue = $1,010

Therefore, the correct answer is C, $910, which is the total revenue earned when 7 shirts are sold under perfect price discrimination.

Table 15-6 Dreher's Designer Shirt Company,a Monopolist,has the Following Cost and Revenue