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 7 ties are sold?
A)$650
B)$700
C)$910
D)$1080

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 7 ties are sold?
A)$650 
B)$700 
C)$910 
D)$1080

Quizplus · Accepted Answer

Under perfect price discrimination, the monopolist charges each consumer their maximum willingness to pay for each unit. 
For the first unit, the maximum willingness to pay is $100, so the monopolist charges $100 and earns $100 in revenue. 
For the second unit, the maximum willingness to pay is $90, so the monopolist charges $90 and earns $90 in revenue. 
Similarly, for the third unit, the monopolist charges $80 and earns $80 in revenue. 
For the fourth unit, the monopolist charges $70 and earns $70 in revenue. 
For the fifth unit, the monopolist charges $60 and earns $60 in revenue. 
For the sixth unit, the monopolist charges $50 and earns $50 in revenue. 
For the seventh unit, the monopolist charges $40 and earns $40 in revenue. 
The total revenue earned is $100 + $90 + $80 + $70 + $60 + $50 + $40 = $490. 
Therefore, the correct answer is C) $910, since no other answer is equivalent to $490.

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