Which of the following regarding the outcome of perfect price discrimination is TRUE?
A) Consumer surplus increases.
B) Deadweight loss increases.
C) Producer surplus increases.
D) The economy becomes more efficient.

Question

Quizplus · Accepted Answer

Perfect price discrimination allows the firm to charge each consumer their maximum willingness to pay, which results in the elimination of consumer surplus. As no deadweight loss is incurred, the economy becomes more efficient. However, producer surplus increases as the monopolist can extract more from each consumer.

Which of the Following Regarding the Outcome of Perfect Price