Refer to the information provided in Figure 13.12 below to answer the questions that follow. Figure 13.12
-Refer to Figure 13.12. Suppose a monopolist faces the demand and costs in the figure and is able to perfectly price discriminate. How much profit does the monopolist earn?
A) $0
B) $16,000
C) $32,000
D) Indeterminate from the given information.

Question

Refer to the information provided in Figure 13.12 below to answer the questions that follow.  Figure 13.12
-Refer to Figure 13.12. Suppose a monopolist faces the demand and costs in the figure and is able to perfectly price discriminate. How much profit does the monopolist earn?
A) $0 
B) $16,000 
C) $32,000 
D) Indeterminate from the given information.

Quizplus · Accepted Answer

The monopolist can charge each consumer their willingness to pay, so they earn the entire consumer surplus, which is the area above the supply curve and below the demand curve. In this case, the consumer surplus is a triangle with a base of 4 and a height of 8, so the area is (1/2) * 4 * 8 = $16,000.

Refer to the Information Provided in Figure 13