Assume that a monopolist practices perfect price discrimination.The firm will produce an output rate
A)that is less than the efficient level of output.
B)that is greater than the efficient level of output.
C)that is equal to the efficient level of output.
D)that converts consumer surplus into a deadweight loss.

Question

Quizplus · Accepted Answer

Perfect price discrimination charges each consumer their maximum willingness to pay, resulting in no consumer surplus. This leads to a situation where the monopolist produces at the efficient level of output because there is no deadweight loss. Therefore, the monopolist will produce the efficient level of output.

Assume That a Monopolist Practices Perfect Price Discrimination