Under first-degree price discrimination,the marginal revenue curve:
A)is a horizontal straight line.
B)slopes upward.
C)coincides with the monopoly firm's demand curve.
D)is identical to the marginal revenue curve facing a non-price discriminating monopolist.

Question

Quizplus · Accepted Answer

Under first-degree price discrimination, the monopolist is able to charge each consumer their maximum willingness to pay, thus the marginal revenue curve coincides with the demand curve. This is in contrast to a non-price discriminating monopolist, where the marginal revenue curve lies below the demand curve.

Under First-Degree Price Discrimination,the Marginal Revenue Curve