The following figure shows the downward sloping demand and marginal revenue [MR] curves of a monopolist.The MR curve intersects the marginal cost [MC] curve at point B.MC is constant at the price level P₁.
Figure 12-1
-Refer to Figure 12-1.If the monopolist perfectly price discriminates,profit will be equal to:

Question

The following figure shows the downward sloping demand and marginal revenue [MR] curves of a monopolist.The MR curve intersects the marginal cost [MC] curve at point B.MC is constant at the price level P₁.
Figure 12-1

-Refer to Figure 12-1.If the monopolist perfectly price discriminates,profit will be equal to:

Quizplus · Accepted Answer

With perfect price discrimination, the monopolist can charge each consumer the maximum price he or she is willing to pay. This means that the monopolist can capture all of the consumer surplus, which is the area above the demand curve and below the price line. In Figure 12-1, this area is represented by P3CP1.

The Following Figure Shows the Downward Sloping Demand and Marginal