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Managerial Economics · Quiz 2 · 16 Aug 2026 · May 2026 term

Question 18: Suppose the firm can engage in perfect first-degree pric…

Question 18

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Suppose a monopolist has a constant marginal cost MC = 2 and faces the demand curve P = 20 − Q. There are no fixed costs.
Based on the above data, answer the given subquestions.

Suppose the firm can engage in perfect first-degree price discrimination. What is the increase in producer surplus when a monopolist switches from uniform pricing to perfect first-degree price discrimination? PS= ______

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Correct answer: 81

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Question 18 of 28 in the IIT Madras BS Managerial Economics (Managerial Economics) Quiz 2 paper sat on 16 Aug 2026, in the May 2026 term (Managerial Economics 16 Aug 26). It carries 1 mark.

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