Consider a monopoly's first-degree price discrimination. With first-degree price discrimination, deadweight loss is large.

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First-degree price discrimination eliminates deadweight loss because the monopolist charges each consumer their willingness to pay, meaning all gains from trade are captured by the monopolist instead of being lost as deadweight loss. First-degree price discrimination eliminates deadweight loss because the monopoly charges each consumer their own reservation price, which maximizes overall welfare.

Consider a Monopoly's First-Degree Price Discrimination