Suppose a monopoly’s inverse demand curve is P = 100 – Q, it produces
Suppose a monopoly’s inverse demand curve is P = 100 – Q, it produces a product with a constant marginal cost of 20, and it has no fixed costs. Compared to the consumer surplus if the market were perfectly competitive, consumer surplus is how much less when the monopolist practices perfect price discrimination?
A) 3200
B) 1600
C) 800
D) 0
ANSWER
A
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