The more block prices a monopoly can set instead of setting a single price,
A) the smaller the deadweight loss.
B) the more producer surplus.
C) the larger the total welfare.
D) All of the above.

Question

Quizplus · Accepted Answer

When a monopoly can set more block prices, it can capture more consumer surplus as producer surplus and decrease deadweight loss. The larger the number of block prices, the more differentiated the prices are, leading to a larger total welfare. Therefore, all of the above options are correct.

The More Block Prices a Monopoly Can Set Instead of Setting