Which of the following statements is correct? Under perfect price discrimination

Question

Which of the following statements is correct?

Under perfect price discrimination, there is no deadweight loss.

If a monopoly can separate its buyers into relatively few identifiable markets and pursue a separate monopoly pricing policy in each market, then profit-maximizing price will be higher in markets in which demand is less elastic.

Natural monopolies, by definition, exhibit decreasing average costs over a broad range of output levels. Consequently, enforcement of a marginal cost pricing policy would require natural monopolies to operate at a loss.

All of the above.

Under perfect price discrimination, there is no deadweight loss.

If a monopoly can separate its buyers into relatively few identifiable markets and pursue a separate monopoly pricing policy in each market, then profit-maximizing price will be higher in markets in which demand is less elastic.

Natural monopolies, by definition, exhibit decreasing average costs over a broad range of output levels. Consequently, enforcement of a marginal cost pricing policy would require natural monopolies to operate at a loss.

All of the above.

Explanation / Answer

d) All of the above

By,

Nishant Bhatt

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