Multiple Choice
If the firm's marginal cost is constant at $3.00, the perfect price discriminating firm will charge each customer:
12. Monopoly
Price Discrimination
Struggling with Microeconomics?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
The total revenue for the perfectly price discriminating monopolist from selling five units of output is:
A
$5
B
$15
C
$18
D
$25
Verified step by step guidance1
Understand that a perfectly price discriminating monopolist charges each consumer the maximum price they are willing to pay for each unit.
Refer to the demand schedule provided. For each unit sold, the price is different, reflecting the maximum willingness to pay.
Calculate the total revenue by summing up the prices for the first five units sold. According to the demand schedule, these prices are $8, $7, $6, $5, and $4.
Add these prices together: $8 + $7 + $6 + $5 + $4.
The sum of these prices will give you the total revenue for selling five units of output.
Related Videos
Related Practice
Price Discrimination practice set
Problem sets built by lead tutorsExpert video explanations