The correct answer is A. First-degree price discrimination.
First-degree price discrimination is the most extreme form of price discrimination. It occurs when a monopolist is able to charge each customer the maximum price they are willing to pay for a good or service. This is possible when the monopolist has perfect information about each customer’s willingness to pay.
Second-degree price discrimination occurs when a monopolist is able to charge different prices for different units of a good or service. This is possible when the monopolist has imperfect information about each customer’s willingness to pay. For example, a monopolist might charge a lower price for a quantity discount.
Third-degree price discrimination occurs when a monopolist is able to charge different prices to different groups of customers. This is possible when the monopolist can identify different groups of customers with different willingness to pay. For example, a monopolist might charge a lower price to students than to adults.
In the case of the question, the monopolist is able to sell each separate unit of the output at a different price according to the pocket of the customer. This means that the monopolist is able to charge each customer the maximum price they are willing to pay. This is an example of first-degree price discrimination.