Exhibit 9.11

-Refer to Exhibit 9.11,which shows the cost and revenue curves faced by a monopolist.If this monopolist practices perfect price discrimination,the consumer surplus is _____
A) equal to area a + b + c.
B) equal to area b + e.
C) equal to area b.
D) equal to zero.

Question

Exhibit 9.11
 
-Refer to Exhibit 9.11,which shows the cost and revenue curves faced by a monopolist.If this monopolist practices perfect price discrimination,the consumer surplus is _____
A) equal to area a + b + c. 
B) equal to area b + e. 
C) equal to area b. 
D) equal to zero.

Quizplus · Accepted Answer

In perfect price discrimination, a monopolist charges each consumer the maximum they are willing to pay, thus capturing all the consumer surplus for themselves. Therefore, the consumer surplus is reduced to zero.

Exhibit 9.11 -Refer to Exhibit 9.11,which Shows the Cost and Revenue Curves