Figure 10.3 Perfect Price Discrimination without Market Power: What Went Wrong with Naming Your Own Price
With market power, Priceline could use perfect price discrimination to capture the entire surplus above MC but below D, the area A + B. However, because it does not have market power, Priceline’s demand curve Dact is below demand curve D. Using perfect price discrimination, Priceline can only capture B, the area above MC but below Dact.