21. Suppose the firm above is able to price discriminate, charges a price of $80 for the first 120 units, and a price of $60 for the next 50 units. What is the change in consumer surplus (CS) and producer surplus (PS) as a result of this price discrimination (compared to if they were a single price monopolist). a. CS increases by $250; PS increases by $500. b. CS decreases by $500; PS increases by $1,500. c. CS does not change; PS increases by $1,500. d. CS increases by $500; PS increases by $1,000.

21. Suppose the firm above is able to price discriminate, charges a price of $80 for the first 120 units, and a price of $60 for the next 50 units. What is the change in consumer surplus (CS) and producer surplus (PS) as a result of this price discrimination (compared to if they were a single price monopolist). a. CS increases by $250; PS increases by $500. b. CS decreases by $500; PS increases by $1,500. c. CS does not change; PS increases by $1,500. d. CS increases by $500; PS increases by $1,000.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter18: Asymmetric Information

Section: Chapter Questions

Problem 18.3P

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