If a firm could perfectly price discriminate,
A)the marginal revenue curve would be the same as the demand curve.
B)the marginal revenue curve would lie below the demand curve.
C)the marginal revenue curve would lie above the demand curve.
D)there would be no marginal revenue function.

Question

Quizplus · Accepted Answer

In perfect price discrimination, a firm charges each consumer the maximum they are willing to pay, effectively capturing the entire area under the demand curve. This means the firm sells each additional unit at the exact price that consumers are willing to pay for that unit, making the marginal revenue for each unit equal to the price of that unit. Therefore, the marginal revenue curve coincides with the demand curve.

If a Firm Could Perfectly Price Discriminate