In perfect price discrimination,consumer surplus is zero because each consumer pays:
A) the market price.
B) the cost price.
C) peak load price.
D) the reservation price

Question

Quizplus · Accepted Answer

In perfect price discrimination, the firm charges each consumer their reservation price, which is the maximum amount that a consumer is willing to pay for a good or service. This means that consumer surplus is completely eliminated, as each consumer is paying exactly what they are willing to pay and no more. Therefore, the correct answer is (D) reservation price.

In Perfect Price Discrimination,consumer Surplus Is Zero Because Each Consumer