Use the figure below to answer the following question. Figure 12.4.3
-Refer to Figure 12.4.3.The outcome is efficient if
A)the monopoly is able to perfectly price discriminate.
B)the price consumers pay is greater than marginal cost.
C)the price consumers pay is less than marginal cost.
D)the quantity produced is 80 units.
E)the quantity produced is 20 units.

Question

Use the figure below to answer the following question.  Figure 12.4.3
-Refer to Figure 12.4.3.The outcome is efficient if
A)the monopoly is able to perfectly price discriminate. 
B)the price consumers pay is greater than marginal cost. 
C)the price consumers pay is less than marginal cost. 
D)the quantity produced is 80 units. 
E)the quantity produced is 20 units.

Quizplus · Accepted Answer

When a monopoly can perfectly price discriminate, it means that it can charge each consumer the maximum they are willing to pay for each unit of the good. This results in the production and sale of every unit for which the consumer's willingness to pay is greater than the marginal cost of production, leading to an allocation of resources that is efficient.

Use the Figure Below to Answer the Following Question