Question

Compared to the monopoly outcome with a single price, imperfect price discrimination _________.

(i) sometimes raises total surplus.
(ii) sometimes lowers total surplus.
(iii) always leads to a lower quantity of output.
(i) and (ii) only
(ii) and (iii) only
(i) and (iii) only
(i), (ii), and (iii)

Answer 1

The correct options are (i) and (ii) only

Step-by-step explanation:

Price discrimination raises the monopoly's profit otherwise they will choose to charge all the customers the same price.

Examples of price discriminations are:

Movie tickets; theaters charge a lower price for children and older citizens compared to other patrons.

Airplane Tickets; Airplane seats are sold at different prices, many airlines charge a lower price for a round trip ticket between 2cities.

Answer 2

(i) and (ii) only

Step-by-step explanation:

Compared to the monopoly outcome with a single price, imperfect price discrimination

(i) sometimes raises total surplus.

(ii) sometimes lowers total surplus.