Figure 15-12

Figure 15-12 shows the cost and demand curves for a monopolist.
-Refer to Figure 15-12.What is the amount of consumer surplus if, instead of monopoly, the industry was organized as a perfectly competitive industry?
A)$21
B)$124
C)$186
D)$332

Question

Figure 15-12
  
Figure 15-12 shows the cost and demand curves for a monopolist.
-Refer to Figure 15-12.What is the amount of consumer surplus if, instead of monopoly, the industry was organized as a perfectly competitive industry?
A)$21 
B)$124 
C)$186 
D)$332

Quizplus · Accepted Answer

In a perfectly competitive market, consumer surplus is maximized because the price equals marginal cost. The consumer surplus is the area above the price level and below the demand curve, which is typically larger than in a monopoly.

Figure 15-12 Figure 15-12 Shows the Cost and Demand Curves for a and Demand