Question

.Consumers are better off with pricing in the following order: 1)________; 2)________; 3)________.

Select one:

A. competitive market; single-price monopoly; perfect price discrimination

B. single-price monopoly; competitive market; perfect price discrimination

C. competitive market; perfect price discrimination; single-price monopoly

D. Unable to determine.

Answer 1

Answer:

Option (A) is correct.

Explanation:

(i) Competitive market

(ii) Single price monopoly

(iii) perfect price discrimination

Consumer surplus are the highest in the perfectly competitive market conditions as compared to single price monopoly because prices are determined by the market forces and firms are the price taker.

Consumer surplus is zero when there is a perfect price discrimination because price is charged according to the willingness of the consumer.