Result of establishing a single price and Ramsey prices

The main difference between price discrimination and Ramsey pricing is that the former model results in the highest potential profit for the monopolist, whereas Ramsey pricing, as a prescriptive tool for regulating a public monopoly, only aims at recovering the sunk cost of the investment. 

Those who defend international free trade do so on the basis that it increases economic efficiency. The most commonly used arguments are  

The profits resulting from specialization in the manufacture of products in which a company has a comparative advantage lead to an increase in welfare. 

A larger market means keener competition between products, which leads to lower prices and the disappearance of inefficient producers. 

Competition between producers leads to the reduction of prices to just above the marginal cost of production, resulting in the maximization of social welfare. 

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Figure 5.1 Result of establishing a single price and Ramsey prices...

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