Use the following figure to answer the question : Figure 11-6 : shows the profit-maximizing output of a monopolist who faces constant average and marginal costs.
-Refer to Figure 11-6.When the firm operates as a profit-maximizing monopolist as compared to a perfectly competitive firm,consumer surplus changes by _____.
A)-ABC
B)AFBG
C)-P''ACP
D)P''ABP

Question

Use the following figure to answer the question : Figure 11-6 : shows the profit-maximizing output of a monopolist who faces constant average and marginal costs. 
-Refer to Figure 11-6.When the firm operates as a profit-maximizing monopolist as compared to a perfectly competitive firm,consumer surplus changes by _____.
A)-ABC 
B)AFBG 
C)-P''ACP 
D)P''ABP

Quizplus · Accepted Answer

When the firm operates as a profit-maximizing monopolist, it restricts output to Qm and charges a price of Pm, which is higher than the price charged by a perfectly competitive firm (Pc). As a result, consumer surplus decreases by the area of the triangle P''ACP.

Use the Following Figure to Answer the Question : Figure