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Question
Refer to the following table. Imagine there are two cities (City A and City R) and you are the only provider of ice cream sandwiches for both. Use this information to answer the following questions:
Maximum Willingness to Pay (MWP) for Ice
Cream Sandwiches
| City A | MWP | City R | MWP |
| Aladdin | $16 | Richard | $15 |
| Alan | $12 | Ramon | $14 |
| Alvin | $10 | Robert | $13 |
| Albert | $8 | Roger | $11 |
| Albus | $6 | Reginald | $4 |
Note: Unit cost is $7 for each ice cream sandwich
If an individual could charge a different price to each consumer in both cities (perfect price discrimination), how much more would this person earn compared to when he or she can charge a single price to everyone (monopoly)?
a. $40
b. $39
c. $35
d. $18
e. $10
Answer
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