Use the following to answer question:
Figure 10.3
-(Figure 10.3) Producer surplus using perfect price discrimination is _____ greater than under perfect competition and _____ greater than under monopoly.
A) $800; $400
B) $1,600; $800
C) $3,200; $1,600
D) $4,800; $3,200

Question

Use the following to answer question:
Figure 10.3 
-(Figure 10.3) Producer surplus using perfect price discrimination is _____ greater than under perfect competition and _____ greater than under monopoly.
A) $800; $400 
B) $1,600; $800 
C) $3,200; $1,600 
D) $4,800; $3,200

Quizplus · Accepted Answer

The producer surplus under perfect price discrimination is the shaded triangle above the supply curve and below the demand curve, which is $1,600. This is twice the producer surplus under perfect competition, which is $800 (area between the supply and market price), and four times the producer surplus under monopoly, which is $400 (area between the supply and demand curves). Therefore, the correct answer is B.

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