Compared with imperfect price discrimination, deadweight loss under a nondiscriminating monopoly is:
A) lower.
B) higher.
C) the same.
D) impossible to determine.

Question

Quizplus · Accepted Answer

Under imperfect price discrimination, the monopolist can charge different prices to different consumers based on their willingness to pay, reducing deadweight loss. On the other hand, under nondiscriminatory monopoly, the monopolist charges a single price to all consumers, which is higher than the marginal cost, resulting in deadweight loss. Therefore, deadweight loss under a monopolist is higher when compared with imperfect price discrimination.

Compared with Imperfect Price Discrimination, Deadweight Loss Under a Nondiscriminating