Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 63, Problem 3MCQ
To determine
Expert Solution & Answer
Answer to Problem 3MCQ
(b) Equals zero.
Explanation of Solution
With perfect price discrimination, consumer surplus equals zero because the monopolist can charge a different price to different groups of consumers to its maximum willingness to pay which leaves zero consumer surplus and transfer it to the profit. Hence, option (b) is correct and options (a), (c), (d), and (e) are incorrect.
Economics Concept Introduction
When a monopolist charges a price equal to each group of consumers’ willingness to pay which is a maximum willingness to pay then it is called perfect price discrimination. In perfect price discrimination, monopolists extract all consumer surplus by charging different prices to a different consumers.
Chapter 63 Solutions
Krugman's Economics For The Ap® Course
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