The following figure depicts a generalized downward-sloping market demand (D)curve for a product.It also shows the firm's relevant marginal revenue (MR)curve and marginal cost (MC)curve.Refer to this figure to answer the following questions:

-If the firm can price discriminate perfectly,which of the following areas would be designated as consumer surplus?
A) A
B) B
C) C
D) A + B
E) There is no consumer surplus.

Question

The following figure depicts a generalized downward-sloping market demand (D)curve for a product.It also shows the firm's relevant marginal revenue (MR)curve and marginal cost (MC)curve.Refer to this figure to answer the following questions:
 
-If the firm can price discriminate perfectly,which of the following areas would be designated as consumer surplus?
A) A 
B) B 
C) C 
D) A + B 
E) There is no consumer surplus.

Quizplus · Accepted Answer

In perfect price discrimination, the firm charges each consumer the maximum they are willing to pay, eliminating consumer surplus entirely. This means consumers pay exactly their valuation for the product, leaving no surplus value over the price paid.

The Following Figure Depicts a Generalized Downward-Sloping Market Demand (D)curve