What Is the Result When a Monopolist Is Able to Price-Discriminate

question 18

Multiple Choice

What is the result when a monopolist is able to price-discriminate?

• A) Both its profits and consumer surplus tend to increase.
• B) Both its profits and consumer surplus tend to decrease.
• C) Its profits tend to increase and consumer surplus tends to fall.
• D) Its profits tend to fall and consumer surplus tends to increase.

---

Definitions:

Federal Trade Commission

A U.S. federal agency established to protect consumers and ensure a strong competitive market by enforcing antitrust and consumer protection laws.

Antitrust Laws

Legislation designed to promote competition and restrict monopolies by regulating anti-competitive practices.

Economic Efficiency

The optimal allocation of resources to maximize the production of goods and services.

Creative Destruction

A concept in economics which signifies the process by which new innovations lead to the demise of older technologies, leading to economic progress.