With perfect price discrimination the monopoly
A)eliminates all price discrimination by charging each customer the same price.
B)charges each customer an amount equal to the monopolist's marginal cost of production.
C)eliminates deadweight loss.
D)eliminates profits and increases consumer surplus.

Question

Quizplus · Accepted Answer

With perfect price discrimination, the monopolist is able to charge each consumer their maximum willingness to pay. This eliminates deadweight loss because the monopolist is able to capture all possible surplus, and therefore, there is no inefficiency in the market. However, profits will still exist because the monopolist is charging the highest possible price to each consumer.

With Perfect Price Discrimination the Monopoly