Perfect price discrimination describes a situation in which the monopolist
A)knows the exact willingness to pay of each of its customers.
B)charges exactly two different prices to exactly two different groups of customers.
C)maximizes consumer surplus.
D)experiences a zero economic profit.

Question

Quizplus · Accepted Answer

Perfect price discrimination occurs when the monopolist is able to charge each customer the maximum price they are willing to pay for the good or service, thereby capturing all of the consumer surplus for themselves. This requires the monopolist to know the exact willingness to pay of each customer, which is option A.

Perfect Price Discrimination Describes a Situation in Which the Monopolist