Help with econ question (Monopoly)?
Imagine that a firm currently operating as a single-price monopoly develops a brain-scanning technology that allows them to perfectly price discriminating, but the government bans its use until consumers agree to use it. Which of the following solutions will both make the firm want to use the technology and customers agree that the firm can use it? (Assume customers will agree to allow use of any technology that increases total consumer surplus, and the firm will only use the technology if it makes them more money).
Group of answer choicesA. There is no way to get customers and the firm to both want to use it because perfect price discrimination is inefficient.B. The firm uses the technology and prices each unit it sells at exactly the units marginal cost. This ensures that every consumer agrees with the technology being used and so is efficient.C. The firm uses the technology to charge each consumer their RV, but also gives discounts to each consumer, with the total discount barely exceeding the single-price monopoly consumer surplus.D. The firm uses the technology but agrees to set the price where MC = MR, leading to the inverse situation of a single-price monopoly.E. The firm uses the technology and prices each unit at the competitive price where MC = D.
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