14. Consider the same industry once more. If this industry is organized as a monopoly, but is able to engage in perfect price discrimination, the deadweight loss is 0.

   If a firm could somehow engage in perfect price discrimination it would be able to determine each consumer's exact marginal willingness to pay for each unit sold, so it would continue selling as long as it could sell for a price above marginal cost. This means that the firm ends up producing the allocatively efficient level of output, but only having to sell the last unit for a price of $12, the rest are sold for more. Such a firm's profit would equal the large blue area to the right, so there would be no deadweight loss since all surplus goes to the firm.

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