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11 January, 20:27

A monopolist practicing (perfect) price discrimination has:

a. the same deadweight loss triangle as a single-price monopolist.

b. a larger deadweight loss triangle than a single-price monopolist has.

c. a deadweight loss triangle one-half the size of what it would be with uniform pricing.

d. no deadweight loss triangle.

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  1. 11 January, 20:47
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    Option (d) is correct.

    Explanation:

    A perfect price discrimination is also known as first degree price discrimination. Under a condition of perfect price discrimination, the firms charge prices according to the willingness of the buyers. So, there will be no consumer surplus and no dead-weight loss because prices of the product are exactly equal to the its marginal cost which makes the market allocative efficient.
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