Question

19 A monopolist engaging in third-degree price discrimination

1. has lower profit than a monopolist engaging in first-degree price discrimination
2. creates a deadweight loss
3. can identify with group of consumers any particular individual consumer belongs to
4. can prevent arbitrage between different groups (or types) of consumers but not within groups of consumers.
5. All of the above

Answer 1

Ans.- (E)

All of the given statements hold when a monopolist firm practices third degree price discrimination .