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AP Microeconomics 4.3: Price Discrimination

Understand how firms with market power use price discrimination to capture consumer surplus and how perfect discrimination changes efficiency.

Syllabus
Effective Fall 2025
Course
AP Microeconomics

Covered syllabus points

PRD-3.B—b. Explain (using graphs where appropriate) equilibrium, firm decision making, consumer surplus, producer surplus,…—Topic 4.3

4.3 Price Discrimination question 1

[Maximum number: 2]

The graph below shows the demand curve (D), marginal revenue curve (MR), marginal cost curve (MC), average total cost curve (ATC), and long-run average total cost curve (LRATC) for a monopolist.

Figure for Question 4.3 Price Discrimination question 1 — AP Microeconomics

Question (a)

(a)

Suppose the monopolist perfectly price discriminates and chooses the quantity that maximizes profit. Determine the dollar value of each of the following.

[ 2 ]

Question (i)

(i)

The monopolist's profit

[ 1 ]

Question (ii)

(ii)

The consumer surplus

[ 1 ]
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