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Suppose that a monopoly makes a loss if it charges a uniform price to all its...

Suppose that a monopoly makes a loss if it charges a uniform price to all its customers, but is

able to make a profit if it uses a second-degree price discrimination scheme. Does the price

discrimination bring us closer or further away from efficiency? Why?

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Answer #1

Usually in the case of a second degree price discrimination, the more quantity consumed the less the price would be and in this regard if the Monopoly uses this sort of price discrimination what happens is there different people or consumers actually get to pay different prices and this allows the the Monopoly at times to actually capture the consumer surplus and from the perspective of the Monopoly it's actually beneficial to them in terms of profit but in reality it is moving farther from efficiency or market conditions all in all

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