When a market model moves from that of a monopoly to one in which perfect price discrimination is practiced, the deadweight loss:

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Blanchard

Business

11 August, 05:42

When a market model moves from that of a monopoly to one in which perfect price discrimination is practiced, the deadweight loss:

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Janetta · Answer 1

The deadweight loss decreases.

Explanation:

Deadweight loss is defined as the loss to society that is caused by price controls and taxes.

A monopoly market has control over the prices.

Price discrimination is the practice of charging a different price for the same good or service. There are three types of price discrimination - first-degree, second-degree, and third-degree price discrimination.

The firm is able to charge the maximum possible price for each unit which enables the firm to capture all available consumer surplus for itself.