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Essentials of Economics (MindTap C...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781337091992
BuyFind

Essentials of Economics (MindTap C...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781337091992

Solutions

Chapter
Section
Chapter 14, Problem 6CQQ
Textbook Problem

When a monopolist switches from charging a single price to practicing perfect price discrimination, it reduces

a. the quantity produced.

b. the firm’s profit.

c. consumer surplus.

d. total surplus.

Expert Solution
To determine

Perfect price discrimination of monopoly.

Explanation of Solution

Option (c):

There is a decrease in the consumer surplus, which increases the producer surplus.Thus, option ‘c’ is correct.

Option (a):

Price discrimination increases the output, as different prices are charged to different consumers allowing potential consumer to purchase goods. Thus, option ‘a’ is incorrect...

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Chapter 14 Solutions

Essentials of Economics (MindTap Course List)
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