Question

Group price discrimination has ________ consumer surplus than under ________.

Select one:

A. more; an elastic demand curve
B. less; perfect competition
C. less; single-price monopoly
D. more; perfect competition

Answer 1

The correct answer is letter "B": less; perfect competition.

Step-by-step explanation:

Typically, more output is produced in perfect competition markets than in markets ruled by price discrimination. Consumer surplus is greater at the same time. Group price discrimination transfers the company some of the competitive consumer surpluses as an additional profit and causes the loss of deadweight due to reduced production.