Figure 15-17
-Refer to Figure 15-17. Which of the following areas represents the consumer surplus from this profit-maximizing monopolist?
A)ABE
B)BCFE
C)EFG
D)ACG

Question

Figure 15-17 
-Refer to Figure 15-17. Which of the following areas represents the consumer surplus from this profit-maximizing monopolist?
A)ABE 
B)BCFE 
C)EFG 
D)ACG

Quizplus · Accepted Answer

Consumer surplus is the area below the demand curve and above the price (bounded by the quantity sold). In this diagram, the demand curve is represented by the line that intersects the vertical axis at point A, and the price charged by the monopolist is represented by the point where the demand curve intersects the marginal cost curve (at point C). The quantity sold is represented by point E. Therefore, the consumer surplus is the area below the demand curve and above the price, which is the triangle ABE.

Figure 15-17 -Refer to Figure 15-17. Which of the Following Areas Represents