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Figure: Price-Discriminating Monopolist 2
-(Figure: Price-Discriminating Monopolist 2) Consumer surplus with a single-price monopoly is ______, and consumer surplus with a perfect price discrimination is ______.
A) $12; $4
B) $6; $0
C) $14; $10
D) $8; $0

Question

Use the following to answer questions:
Figure: Price-Discriminating Monopolist 2 
-(Figure: Price-Discriminating Monopolist 2) Consumer surplus with a single-price monopoly is ______, and consumer surplus with a perfect price discrimination is ______.
A) $12; $4 
B) $6; $0 
C) $14; $10 
D) $8; $0

Quizplus · Accepted Answer

With a single-price monopoly, the consumer surplus is the area between the demand curve and the single-price set by the monopolist, which is $8 in this case. 
With perfect price discrimination, the monopolist charges each consumer their maximum willingness to pay, resulting in no consumer surplus. Therefore, the consumer surplus is $0. 
Hence, the correct option is D.

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