A perfectly price-discriminating monopolist:
A. increases both consumer surplus and producer surplus.
B. reduces or eliminates the welfare loss from monopoly.
C. creates more consumer surplus for the consumer.
D. increases the welfare loss from monopoly.
Answer: B
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A) total revenue and total explicit cost. B) total revenue and total cost. C) total revenue and variable cost. D) marginal revenue and marginal cost.
Refer to Figure 15-16. Suppose the government regulates this industry in order to remove the inefficiency implied by the behavior of the profit-maximizing owners
If regulators require that the firm produces the economically efficient output level, what is this level and what price will be charged? A) Q3 units; P3 B) Q1 units; P1 C) Q1 units; P4 D) Q4 units; P6
A sudden decrease in the market demand in a competitive industry leads to
a. A market equilibrium price higher than the original equilibrium in the short-run b. A market equilibrium price equal to the original equilibrium in the long-run c. Both a and b d. None of the above
Which of the following central bank policies will raise the money supply?
a. Buying government securities. b. Selling foreign currency in the foreign exchange market. c. Raising the discount rate. d. All of the above. e. None of the above.