Suppose that a price - discriminating monopolist faces a downward - loping demand curve with a vertical intercept of $8. Given the firm's cost conditions, a monopolist would choose a price of $4 and sell 4 units of output to maximize profit. How much consumer surplus would be lost if the irm practiced second-degree price discrimination, selling 2 units at $6

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Chapter1: Making Economics Decisions
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Suppose that a price - discriminating monopolist faces a downward -
sloping demand curve with a vertical intercept of $8. Given the firm's cost
conditions, a monopolist would choose a price of $4 and sell 4 units of
output to maximize profit. How much consumer surplus would be lost if the
firm practiced second-degree price discrimination, selling 2 units at $6
each and then the additional 2 units at $4 each? The amount of consumer
surplus cannot be determined from the information provided. $16 $4 $8
Transcribed Image Text:Suppose that a price - discriminating monopolist faces a downward - sloping demand curve with a vertical intercept of $8. Given the firm's cost conditions, a monopolist would choose a price of $4 and sell 4 units of output to maximize profit. How much consumer surplus would be lost if the firm practiced second-degree price discrimination, selling 2 units at $6 each and then the additional 2 units at $4 each? The amount of consumer surplus cannot be determined from the information provided. $16 $4 $8
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