With perfect price discrimination, which of the following is true for the marginal revenue curve?
A)It is below the demand curve.
B)It is above the demand curve.
C)It is equal to the demand curve.
D)It is horizontal.

Question

Quizplus · Accepted Answer

In perfect price discrimination, the seller charges each buyer their maximum willingness to pay, thus capturing the entire area under the demand curve as producer surplus. This means the marginal revenue (MR) curve coincides with the demand curve, as each additional unit is sold at its own unique price, exactly equal to the buyer's valuation.

With Perfect Price Discrimination, Which of the Following Is True