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Suppose a monopolist can practice any one of the three types of price discriminations, which one...

Suppose a monopolist can practice any one of the three types of price discriminations, which one would she choose to get maximum possible profits? Why?

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Answer #1

The monopolist will choose to perfectly price discriminate, i.e. first degree price discrimination, here, the firm will be charging the maximum price to the consumer they are willing to pay. for example, a professional is ready to buy a laptop for $1500 they will be charged the same price and the student is willing to buy it at a price of $1200, they will be charged that.

this will increase the profit of the firm to maximum and transfer the whole consumer to the producer. this will maximise the profit.

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