Question

All of the following are true for first−degree price discrimination except which​ one? A. Consumers receive...

All of the following are true for first−degree price discrimination except which​ one?

A. Consumers receive no consumer surplus.

B. Consumers pay less for the first units that they purchase.

C. In​ reality, it is impossible to practice.

D. Each consumer pays the maximum price they are willing to pay for every unit purchased.

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Answer #1

First degree price discrimination is one in which seller charges different prices from different buyers. That is the seller is having perfect knowledge on the buyers and they are able to charge different price from different buyers. They are able to differentiate amongst buyer and charge them the maximum price they are willing to pay hence they capture all the consumer surplus.

All are correct except B. Consumers pay less for the first units that they purchase.

Because here the monopolist charges the customer the maximum price they are willing to pay.

Please contact if having any query will be obliged to you for your generous support. Your help mean a lot to me. Please help thank you.

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