When a monopolist faces two types of outwardly indistinguishable consumers, one with a higher willingness to pay then the other, then, by using non-linear pricing, the monopolist will extract the entire consumer surplus from the customer with the high willingness to pay and only part of the surplus from the customer with the lower 'II'
When a monopolist faces two types of outwardly indistinguishable consumers, one with a higher willingness to pay then the other, then, by using non-linear pricing, the monopolist will extract the entire consumer surplus from the customer with the high willingness to pay and only part of the surplus from the customer with the lower 'II'
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter14: Monopoly
Section14.4: Price Discrimination
Problem 4QQ
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Transcribed Image Text:When a monopolist faces two types of outwardly indistinguishable consumers, one
with a higher willingness to pay then the other, then, by using non-linear pricing, the
monopolist will extract the entire consumer surplus from the customer with the high
willingness to pay and only part of the surplus from the customer with the lower
willingness to pay.
True
False
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