When a monopolist is able to price-discriminate:
A) its profits tend to increase and its output tends to fall.
B) both its profits and output tend to increase.
C) both its profits and output tend to decrease.
D) its profits tend to fall and its output tends to increase.

Question

Quizplus · Accepted Answer

When a monopolist price-discriminates, it can charge different prices to different consumers based on their willingness to pay, leading to increased profits and typically increased output as it can sell more units at varying prices.

When a Monopolist Is Able to Price-Discriminate