In the case of a perfectly price-discriminating monopoly, there is:
A) some deadweight loss.
B) no deadweight loss.
C) as much deadweight loss as in the case of a standard monopoly.
D) as much deadweight loss as in the case of monopolistic competition.

Question

Quizplus · Accepted Answer

A perfectly price-discriminating monopoly charges each customer the maximum price they are willing to pay, resulting in no deadweight loss. This is because the monopoly captures all consumer surplus and there is no inefficiency due to a gap between marginal cost and marginal revenue.

In the Case of a Perfectly Price-Discriminating Monopoly, There Is