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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

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