Consider a monopoly's first-degree price discrimination. With first-degree price discrimination, total surplus is greater than when the monopoly charges a uniform price.

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In first-degree price discrimination, the monopoly charges each individual customer their maximum willingness to pay, allowing the monopoly to capture all consumer surplus. As a result, total surplus (consumer surplus + producer surplus) is higher than when the monopoly charges a uniform price, as the monopoly is able to increase its profits by extracting more surplus from consumers. First-degree price discrimination allows the monopoly to charge each individual consumer their maximum willingness to pay, which results in a higher overall price and a higher total surplus for both the producer and the consumer.

Consider a Monopoly's First-Degree Price Discrimination