21. Suppose the firm above is able to price discriminate, charges a price of $80 for the first 120 units, and a price of $60 for the next 50 units. What is the change in consumer surplus (CS) and producer surplus (PS) as a result of this price discrimination (compared to if they were a single price monopolist). a. CS increases by $250; PS increases by $500. b. CS decreases by $500; PS increases by $1,500. c. CS does not change; PS increases by $1,500. d. CS increases by $500; PS increases by $1,000.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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$80
$60
$40
120
MR
D
MC
A) If Sibyl
-CMI QM
"F-II com
PC + C
C) If prier drinhas
-Charl
170
On
21. Suppose the firm above is able to price discriminate, charges a price of $80 for the first 120 units,
and a price of $60 for the next 50 units. What is the change in consumer surplus (CS) and producer
surplus (PS) as a result of this price discrimination (compared to if they were a single price monopolist).
a. CS increases by $250; PS increases by $500.
b. CS decreases by $500; PS increases by $1,500.
c. CS does not change; PS increases by $1,500.
d. CS increases by $500; PS increases by $1,000.
Transcribed Image Text:$80 $60 $40 120 MR D MC A) If Sibyl -CMI QM "F-II com PC + C C) If prier drinhas -Charl 170 On 21. Suppose the firm above is able to price discriminate, charges a price of $80 for the first 120 units, and a price of $60 for the next 50 units. What is the change in consumer surplus (CS) and producer surplus (PS) as a result of this price discrimination (compared to if they were a single price monopolist). a. CS increases by $250; PS increases by $500. b. CS decreases by $500; PS increases by $1,500. c. CS does not change; PS increases by $1,500. d. CS increases by $500; PS increases by $1,000.
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