If a Monopolist Is Able to Perfectly Price Discriminate, Then

question 10

Multiple Choice

If a monopolist is able to perfectly price discriminate, then:

• A) they will be able to charge every consumer a price equal to their marginal cost of production.
• B) arbitrage will not exist.
• C) prices will fall for those individuals with very inelastic demands.
• D) there will be zero deadweight loss to society.

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Definitions:

Entire Market

The total sales volume of all competitors within a particular industry or sector.

Demand Conditions

Refers to the nature and scale of demand in the industry which affects the competitiveness and strategy of firms.

Potential Competitors

Firms or individuals that are not currently in the market but have the ability to enter and compete in the future.

Oligopolistic Industry

A market structure characterized by a small number of firms dominating the market, leading to strategic interactions in pricing and output.