A monopolist that is able to perfectly price discriminate will end up producing a level of output:
A) less than the efficient market output.
B) greater than the efficient market output.
C) equal to the efficient market output.
D) less than the level of output of a monopolist that does not price discriminate.

Question

Quizplus · Accepted Answer

A monopolist that is able to perfectly price discriminate charges each customer their maximum willingness to pay, capturing all consumer surplus. This results in the monopolist producing at the efficient market output level, where marginal cost equals marginal revenue. Therefore, the output level will be equal to the efficient market output.

A Monopolist That Is Able to Perfectly Price Discriminate Will