Sort the following characteristics by whether they describe competitive markets, firms that can perfectly price-discriminate, both, or neither

Solution:

Competitive market   Perfect price discrimination   Both   Neither     
zero economic profit in the long run   eliminate consumer surplus   maximize total surplus   result in some deadweight loss     

The perfect price discrimination arises when a firm charges a different price for every unit of the product consumed. As the firm will charge the maximum price for each product that enables the firm to capture the entire consumer surplus for itself. The perfect price discrimination eliminate deadweight loss .
In competitive markets keep prices relatively low thus allows the consumers to gain consumer surplus. In a competitive market, equilibrium price and quantity occurs where the quantity and price maximize the total surplus.