The more block prices a monopoly can set instead of setting a single price,the
A)smaller the deadweight loss.
B)the more producer surplus.
C)the larger the total welfare.
D)All of the above.

Question

Quizplus · Accepted Answer

When a monopoly can set more block prices, it can charge different prices to different groups of consumers, which leads to a smaller deadweight loss because the monopoly is capturing more consumer surplus. Additionally, the monopoly can increase producer surplus by capturing more of the market share. This ultimately leads to a larger total welfare as both the producer and consumer surplus increase. Therefore, all of the above choices are correct.

The More Block Prices a Monopoly Can Set Instead of Setting