Which of the following situations allows monopolists to capture the entire consumer surplus as their profit?
A)When they can charge a single price for their product
B)When they are subject to a per unit excise tax
C)When they are subject to an excess profit tax
D)When they can practice perfect price discrimination

Question

Quizplus · Accepted Answer

When a monopolist can practice perfect price discrimination, they can charge each consumer the highest price they are willing to pay, capturing the entire consumer surplus as profit. In all other situations, the monopolist will face some restrictions on their ability to set prices and capture the entire consumer surplus.

Which of the Following Situations Allows Monopolists to Capture the Entire