Arnie's Airlines is a monopoly airline that is able to price discriminate.If Arnie's decides to price discriminate,then
A) Arnie's profit increases.
B) consumer surplus increases.
C) Arnie's revenues decrease.
D) Arnie's sells fewer tickets.
E) Arnie can no longer set a price that depends upon the buyer's willingness to pay.

Question

Quizplus · Accepted Answer

Price discrimination allows a monopoly like Arnie's Airlines to capture more consumer surplus by setting different prices for different consumers based on their willingness to pay. This strategy increases the firm's profit by capturing some of the consumer surplus as additional revenue.

Arnie's Airlines Is a Monopoly Airline That Is Able to Price