Table 15-2
Suppose a monopolist faces the following demand curve:

$$\begin{array} { | c | c | }
\hline \begin{array} { c }
\text { Price } \
\text { (Dollars per unit) }
\end{array} & \begin{array} { c }
\text { Quantity } \
\text { (Units) }
\end{array} \
\hline 8 & 300 \
\hline 7 & 400 \
\hline 6 & 500 \
\hline 5 & 600 \
\hline 4 & 700 \
\hline 3 & 800 \
\hline 2 & 900 \
\hline 1 & 1,000 \
\hline
\end{array}$$
-Refer to Table 15-2. The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?
A)400
B)500
C)900
D)4,200

Question

Table 15-2
Suppose a monopolist faces the following demand curve:
​
​
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (Dollars per unit) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { (Units) }
\end{array} \
\hline 8 & 300 \
\hline 7 & 400 \
\hline 6 & 500 \
\hline 5 & 600 \
\hline 4 & 700 \
\hline 3 & 800 \
\hline 2 & 900 \
\hline 1 & 1,000 \
\hline
\end{array}$$ ​
-Refer to Table 15-2. The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?
A)400
B)500
C)900
D)4,200

Quizplus · Accepted Answer

If the monopolist can perfectly price discriminate, it will sell units to every consumer whose willingness to pay is above the marginal cost of $2. According to the table, this includes consumers willing to pay $3, $4, $5, $6, $7, and $8, which corresponds to quantities from 800 down to 300 units. However, since the marginal cost is $2, the monopolist will also sell to those willing to pay exactly $2, adding another 900 units. Therefore, the total is 900 units, as all consumers willing to pay more than or equal to the marginal cost of $2 per unit are served.

Table 15-2 Suppose a Monopolist Faces the Following Demand Curve

Table 15-2
Suppose a Monopolist Faces the Following Demand Curve