Exhibit 9-20

-In Exhibit 9-20,how much is the monopoly profit with perfect price discrimination?

Question

Exhibit 9-20
 
-In Exhibit 9-20,how much is the monopoly profit with perfect price discrimination?

Quizplus · Accepted Answer

With perfect price discrimination, the firm can charge each consumer their individual willingness to pay. In this case, there are 4 consumers with willingness to pay of $40, $30, $25, and $20. The total revenue would be $115 ($40 + $30 + $25 + $20), and the total cost is $80 ($40 + $20 + $10 + $10). Therefore, the monopoly profit with perfect price discrimination is $35 ($115 - $80). Option C is the closest value. The other options are either too high or too low.

Exhibit 9-20 -In Exhibit 9-20,how Much Is the Monopoly Profit with Perfect