Which of the following is true about a perfect price- discriminating monopolist?
A) Price always exceeds marginal cost.
B) Price is greater than marginal revenue.
C) The firm makes zero economic profit.
D) The firm produces the efficient level of output.

Question

Quizplus · Accepted Answer

A perfect price-discriminating monopolist can sell each unit of output at the maximum price each consumer is willing to pay, thus equating price and marginal revenue for each unit sold. This means the monopolist will produce where marginal cost equals marginal revenue, which is the efficient level of output, similar to a perfectly competitive market outcome.

Which of the Following Is True About a Perfect Price-