Question
Download Solution PDFWhen a monopolist switches from charging a single price to perfect price discrimination, it reduces:
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe correct answer is Consumer surplus
Key PointsWhen a monopolist switches from charging a single price to perfect price discrimination, it reduces the consumer surplus. Consumer surplus is defined as the difference between what a consumer believes they should pay for a good or service and the total amount that they actually do pay. The amount they pay is known as the market price and what they are willing to pay is noted on the demand curve.
Last updated on Jul 7, 2025
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