With a monopolist engages in perfect price discrimination, the quantity produced and sold
A) is lower than the quantity produced and sold if it adopted a single price.
B) is larger than the quantity produced and sold if it adopted a single price.
C) is the same level as that produced and sold if it adopted a single price.
D) could be lower, higher or the same as that produced and sold if it adopted a single price.

Question

Quizplus · Accepted Answer

With perfect price discrimination, the monopolist charges each customer their maximum willingness to pay, which ensures that all units are sold and there is no consumer surplus left. Therefore, the monopolist will produce and sell a quantity equal to the sum of all individual demand at their respective willingness to pay. This quantity is generally larger than the quantity produced and sold under a single price, where some customers may be priced out of the market. However, since perfect price discrimination requires information on each customer's willingness to pay, it may be costly or impossible to implement in practice.

With a Monopolist Engages in Perfect Price Discrimination, the Quantity