Ceteris paribus, which of the following firms is expected to earn the greatest economic profits?
A)An unregulated monopolist that is able to price discriminate
B)An unregulated monopolist that is unable to price discriminate
C)A regulated monopolist that is required to charge a price that is equal to marginal cost
D)A regulated monopolist that is required to charge a price that is equal to average cost
E)A regulated monopolist that is required to charge a price that is equal to marginal revenue

Question

Quizplus · Accepted Answer

An unregulated monopolist that is able to price discriminate is expected to earn the greatest economic profits because they can charge different prices to different consumers based on their willingness to pay. This allows the monopolist to capture more of the consumer surplus and increase their profits.

Ceteris Paribus, Which of the Following Firms Is Expected to Earn