Table 15-21
Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination.
-Refer to Table 15-21. If the monopolist can engage in perfect price discrimination, what is the total revenue when 3 ties are sold?
A)$140
B)$420
C)$450
D)$620

Question

Table 15-21
Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination. 
-Refer to Table 15-21. If the monopolist can engage in perfect price discrimination, what is the total revenue when 3 ties are sold?
A)$140 
B)$420 
C)$450 
D)$620

Quizplus · Accepted Answer

If the monopolist can engage in perfect price discrimination, it can charge each consumer their willingness to pay for each tie. Thus, for the first tie, the consumer's willingness to pay is $80, for the second tie, it is $70, and for the third tie, it is $60. The total revenue from selling three ties is therefore:

$80 + $70 + $60 = $210 
$70 + $60 = $130 
$60

Total = $210 + $130 + $60 = $400

Therefore, the correct answer is (C) $450.

Table 15-21 Tommy's Tie Company, a Monopolist, Has the Following Cost and Cost