The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-The only types of firms that cannot theoretically practice price discrimination are perfectly competitive firms.

Question

The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
  D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-The only types of firms that cannot theoretically practice price discrimination are perfectly competitive firms.

Quizplus · Accepted Answer

Perfectly competitive firms are price takers, meaning they have no control over the market price and cannot differentiate their product from others in the market, making price discrimination impossible. Other types of firms, under different market structures like monopoly, oligopoly, or monopolistic competition, can have some degree of market power allowing for the possibility of price discrimination.

The Figure Given Below Shows the Cost and Revenue Curves