Use the figure below to answer the following questions. Figure 12.4.2
-Refer to Figure 12.4.2.Assume this monopoly practises perfect price discrimination.Choose the correct statement.
A)The monopoly's behaviour is illegal.
B)One price is charged to young people and a different price to older people.
C)A different price can be charged to each buyer.
D)Price rises as the number of buyers increases.
E)The quantity sold is smaller than the quantity sold by a single-price monopoly.

Question

Use the figure below to answer the following questions.  Figure 12.4.2
-Refer to Figure 12.4.2.Assume this monopoly practises perfect price discrimination.Choose the correct statement.
A)The monopoly's behaviour is illegal. 
B)One price is charged to young people and a different price to older people. 
C)A different price can be charged to each buyer. 
D)Price rises as the number of buyers increases. 
E)The quantity sold is smaller than the quantity sold by a single-price monopoly.

Quizplus · Accepted Answer

Perfect price discrimination allows the monopoly to charge a different price to each buyer, maximizing their profits. It is legal as long as the monopoly is not using discriminatory pricing based on factors such as race or gender. There is no indication that the price rises as the number of buyers increases, and the quantity sold may be smaller than a single-price monopoly, but this is not explicitly indicated in the figure. Therefore, the correct choice is C.

Use the Figure Below to Answer the Following Questions