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Consider a monopolist market. Suppose every buyer in the market demands at most one unit of the good, and the monopolist knows that buyers with
Consider a monopolist market. Suppose every buyer in the market demands at most one unit of the good, and the monopolist knows that buyers with higher income have a higher WTP. If the monopolist can ask people to submit proof of income, its optimal decision is to O perfectly price discriminate and extract all consumer surplus. 0 charge everyone the same price and produce a quantity where marginal cost equals marginal revenue. 0 produce an amount where there is deadweight loss. O exit the market
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