When a monopolist practises price discrimination as opposed to setting a single price,the monopolist increases its profits by capturing consumer surplus.

Question

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Price discrimination allows the monopolist to charge higher prices to consumers with a higher willingness to pay, while also charging lower prices to consumers with a lower willingness to pay. By capturing more of the consumer surplus through this strategy, the monopolist is able to increase its profits.

When a Monopolist Practises Price Discrimination as Opposed to Setting