Question

Price Discriminating Monopolist vs. Single Price Monopolist

I have 4/5 answers to the question correct, but I do not know which ones, and I cannot seem to figure out which one I have incorrect. My answers are:

8

4

8

increases

Less Than

3. (Figure: Price-Discriminating Monopolist 2) The perfectly price-discriminating monopolist in this diagram will produce units of output, and a single-price monopolist would produce units of output. Consumer surplus under a perfectly price discriminating monopolist is_ dollars less than under a single-price monopolist. While, perfect price discrimination results in reduced consumer surplus, it __(increases/decreases) producer surplus and ultimately results in deadweight loss that is_ _(less than/equal to/greater than the amount of deadweight loss found in a perfectly competitive market. (5 pts.) Price $10 MC Demand 2 4 6 8 10 Quantity

Answer 1

The question asked comparison between pcm and monopoly.

1. -> 8 Perfectly price discriminating monopolist sell upto the point MC=AR = Demand. i.e. here quantity & writs 2. 4 Single price monopoly produces where WIR = me here at quantity=unnit 3. --> 8 consumer Surplus a zero under berfectly arscriminating monopony. cs under single price monopoly - her ey X (10.4) *4*4 - 2*16 8 4. increases 5. greater than s - Deadweight loss is los in total surplus that occurs when the economy produces an inefficient quantity Most efficient quantity is produced in perfectly competitive market and most inefficiente in monopoly Total Surphs = consumer Surprist Producer Surplus TS h max in m PCM, DWL is maxin monopoly