Table of contents

0. Basic Principles of Economics1h 5m
1. Reading and Understanding Graphs59m
2. Introductory Economic Models1h 10m
3. The Market Forces of Supply and Demand2h 26m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m
6. Introduction to Taxes and Subsidies1h 46m
7. Externalities1h 12m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. The Costs of Production2h 35m
11. Perfect Competition2h 23m
12. Monopoly2h 13m
13. Monopolistic Competition1h 9m
14. Oligopoly1h 26m
15. Markets for the Factors of Production1h 26m
16. Income Inequality and Poverty35m
17. Asymmetric Information, Voting, and Public Choice39m
18. Consumer Choice and Behavioral Economics1h 16m

12. Monopoly

Price Discrimination

Microeconomics

12. Monopoly

Price Discrimination

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Multiple Choice

If the firm's marginal cost is constant at $3.00, output for a perfect price discriminating monopolist is:

2 units

3 units

4 units

5 units

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Verified step by step guidance

Understand that a perfectly price discriminating monopolist charges each consumer the maximum price they are willing to pay for each unit, which is reflected in the demand schedule.

Identify the marginal cost (MC) of production, which is given as $3.00. This is the cost of producing one more unit of output.

To determine the output level, compare the marginal cost to the price each unit can be sold for, as shown in the demand schedule. The firm will produce and sell units as long as the price is greater than or equal to the marginal cost.

Examine the demand schedule: the firm can sell the first unit for $8, the second for $7, the third for $6, the fourth for $5, and the fifth for $4. All these prices are above the marginal cost of $3.00.

Conclude that the firm will produce and sell up to the point where the price equals or exceeds the marginal cost. In this case, the firm will produce 5 units, as the price for the fifth unit ($4) is still above the marginal cost ($3).