Which of the following statements about perfect price discrimination is FALSE?
A) Perfect price discrimination will lessen losses or raise profit for the monopolist.
B) Buyers pay their reservation price for the good.
C) Total economic surplus is maximized.
D) Practicing perfect price discrimination means the monopolist is setting marginal revenue equal to marginal cost.
E) Consumer surplus is zero.

Question

Quizplus · Accepted Answer

In perfect price discrimination, the monopolist charges each consumer their maximum willingness to pay, capturing all consumer surplus as profit. This means marginal revenue is not equal to marginal cost, as the monopolist is not constrained by a single price point.

Which of the Following Statements About Perfect Price Discrimination Is