(a) Draw a correctly labeled graph for a single-price monopoly and show the profit-maximizing quantity, labeled Q1. (b) Assume the monopoly now engages in perfect price discrimination. On your graph in part (a), show the profit-maximizing quantity for the price-discriminating monopoly, labeled Q2. (c) Based on your answer in part (b), what will happen to the consumer surplus? Explain. (d) Is the output produced by the perfectly price-discriminating monopolist allocatively efficient? Explain. (e) Based on your answer in part (b), will a perfectly competitive market produce a larger, smaller, or the same quantity as the perfectly price discriminating monopolist? Explain.
