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If the local phone company,a monopolist,perfectly price-discriminated,there would be a lower total surplus than if the company did not price discriminate.
Total Surplus
The sum of consumer and producer surplus; a measure of the overall benefit to society from a market transaction.
Perfectly Price-Discriminated
A pricing strategy situation where a seller charges the maximum possible price for each unit consumed that consumers are willing to pay, thereby capturing all potential consumer surplus.
- Assess the repercussions of price discrimination concerning the monetary gains of a monopolist and the excess benefit to consumers.
- Expound on the concept of perfect price discrimination, focusing on its impact on overall efficiency and the surplus experienced by consumers.
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Learning Objectives
- Assess the repercussions of price discrimination concerning the monetary gains of a monopolist and the excess benefit to consumers.
- Expound on the concept of perfect price discrimination, focusing on its impact on overall efficiency and the surplus experienced by consumers.
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