Assume that a monopolist practices perfect price discrimination.The firm will produce an output rate
A)that is less than the efficient level of output.
B)that is greater than the efficient level of output.
C)that is equal to the efficient level of output.
D)that converts consumers surplus into a deadweight loss.

Question

Quizplus · Accepted Answer

In perfect price discrimination, the monopolist charges each customer their maximum willingness to pay, which eliminates consumer surplus but also eliminates deadweight loss. Therefore, the monopolist produces at the efficient level of output.

Assume That a Monopolist Practices Perfect Price Discrimination