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Price discrimination

Suppose a monopolist sells its good to three people. Each person can only purchase one good. The first person is willing to pay $20 for the good, the second person is willing to pay $18, and the third is willing to pay $16. If these three people make up the entire market for this monopolist, the monopolist would face the demand curve shown in the table at right.

Buyer Price
1 $20
2 $18
3 $16

2.1. If a monopolist can perfectly price discriminate, how much total revenue will it receive if it sells all three units?

2.2. If the monopolist cannot price discriminate and has to charge the same price on all units sold, how much total revenue will it receive if it sells three units?

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2.1. If a monopolist can perfectly price discriminate the revenue received ...

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The solution goes into a great amount of detail related to the Price discrimination question being asked. The solution is very easy to follow along and can be easily understood by anyone with a basic understanding of the concepts. The solution answers all the question(s) being asked in a succinct way. Overall, an excellent response.

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