If a Monopolist Is Practising Perfect Price Discrimination, We Know

question 73

Multiple Choice

If a monopolist is practising perfect price discrimination, we know that

• A) the firm is producing a lower output than it would if it were a single- price monopolist.
• B) the firm is facing a perfectly inelastic demand curve.
• C) marginal cost is rising as output rises.
• D) the firm is selling each unit at a different price and capturing all consumer surplus.
• E) the firm is facing a perfectly elastic demand curve.

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Definitions:

Total Revenue

The total amount of money a company receives from selling its goods or services without deducting any costs.

Total Cost

The aggregate amount of expenses incurred in the production of goods or services, including both fixed and variable costs.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a good or service.

Average Variable Cost

The total variable costs divided by the quantity of output produced; it varies with output levels.