A monopolist who practices price discrimination can increase sales but can never increase profits above the level that would result from a single price being set (using the intersection of marginal revenue and marginal cost).

Question

Md.Fishan Ahamed. 111141223 · Accepted Answer

Final Answer : False, Explanation :  A monopolist who practices price discrimination can increase profits above the level that would result from a single price, as long as it is able to segment the market based on willingness to pay and charge higher prices to customers with higher willingness to pay. This allows the monopolist to capture more consumer surplus and increase profits. However, it is possible for price discrimination to reduce overall welfare if it leads to a misallocation of resources.

A monopolist who practices price discrimination can increase sales but can never increase profits above the level that would result from a single price being set (using the intersection of marginal revenue and marginal cost).

Definitions

Learning Objectives

Learning Objectives

Related questions