Monopolists that are able to perfectly price discriminate will produce a level of output equal to the efficient level of output produced in a competitive market.

Question

Quizplus · Accepted Answer

When a monopolist is able to perfectly price discriminate, it can charge each customer the maximum amount they are willing to pay, which means they capture all potential consumer surplus. This results in a situation where the monopolist produces at the level of output where marginal cost equals marginal revenue, which happens to be the efficient level of output in a competitive market. Therefore, the statement is true.

Monopolists That Are Able to Perfectly Price Discriminate Will Produce