Consider the demand for schnitzel in the diagram below Suppo

Consider the demand for schnitzel in the diagram below. Suppose that there is a single seller of schnitzel, who acts as a single-price monopolist.

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Suppose the seller begins perfectly price-discriminating. What areas that used to be neither consumer surplus nor producer surplus now become producer surplus?

	E + H
	A + B
	E
	H

correct answer is A+B

A perfectly price discriminating monopolist means they can charge each consumer the maximum amount they are willing to pay. In such a case, the maximum amount charged for the first unit of gas sold would be P1. The maximum amount charged for the second unit of gas would P2. However, if a monopolist is able to price discriminate, she would not have to lower the price of unit 1 when she sells unit 2. Thus, if a monopolist is able to perfectly price discriminate, the demand curve and the marginal revenue curve are identical. The perfectly discriminating monopolist would produce where marginal revenue or demand equals marginal cost. This would also be the competitive output, so there is no deadweight loss. However, the perfectly price discriminating monopolist gets the entire consumer surplus in this case.

Consider the demand for schnitzel in the diagram below. Suppose that there is a single seller of schnitzel, who acts as a single-price monopolist. Suppose the

Consider the demand for schnitzel in the diagram below Suppo

Solution

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