Asked by Elizaveta Alagoz on Jul 16, 2024
Verified
When a monopolist practices price discrimination as opposed to setting a single price,deadweight loss decreases.
Price Discrimination
The strategy of selling the same product or service at different prices to different groups of consumers, typically based on willingness to pay.
Deadweight Loss
A loss in economic efficiency that occurs when the equilibrium output is not achieved or when supply and demand are out of balance.
- Examine the effects of monopolies on societal well-being, focusing on the ideas of deadweight loss and welfare improvement.
- Comprehend the principle and consequences of price discrimination within monopolistic and oligopolistic markets.
Verified Answer
JG
James GilleyJul 22, 2024
Final Answer :
True
Explanation :
When a monopolist practices price discrimination, they can charge different prices to different customer groups based on their willingness to pay. This reduces the amount of surplus that is lost compared to a scenario where the monopolist charges a single price. As a result, deadweight loss decreases.
Learning Objectives
- Examine the effects of monopolies on societal well-being, focusing on the ideas of deadweight loss and welfare improvement.
- Comprehend the principle and consequences of price discrimination within monopolistic and oligopolistic markets.
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