If a pure monopolist can price discriminate by separating buyers into two or more groups:
A.the marginal revenue curve and the total revenue curve will now coincide.
B.the marginal revenue curve will now shift to a position above the demand curve.
C.the firm will face multiple marginal revenue curves.
D.marginal revenue will become less at each level of output than it would be without price discrimination.
The correct answer is A. The marginal revenue curve and the total revenue curve will now coincide.
When a pure monopolist engages in price discrimination by separating buyers into different groups, they charge different prices to each group based on their willingness to pay. This allows the monopolist to capture more of the consumer surplus and increase profits.
Price discrimination results in different quantities being sold in each market segment. However, in each segment, the monopolist still faces a downward-sloping demand curve.
In this scenario, the marginal revenue curve for each segment will coincide with the demand curve because the monopolist is charging a different price for each unit sold. This means that the marginal revenue curve and the total revenue curve will have the same shape and coincide with each other.
It's important to note that price discrimination can only be achieved if the monopolist can accurately separate buyers into different groups and prevent resale between the groups. If these conditions are not met, then the monopolist may not be able to price discriminate effectively.