When a Monopolist Engages in Perfect Price Discrimination

question 10

Multiple Choice

When a monopolist engages in perfect price discrimination,

• A) the marginal revenue curve lies below the demand curve.
• B) the demand curve and the marginal revenue curve are identical.
• C) marginal cost becomes zero.
• D) the marginal revenue curve becomes horizontal.

---

Definitions:

Sales Discounts

Reductions in the selling price offered to customers, often as an incentive to encourage prompt payment.

Cash Discount

A deduction from the total amount on an invoice allowed by a vendor to encourage prompt payment.

Accounts Receivable

The money owed to a business by its clients for goods or services delivered but not yet paid for.

Sales Discounts

A reduction in the price of goods or services offered by a seller to a buyer, typically used to encourage prompt payment or to reward customers for bulk purchases.