The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-By discriminating between the consumers, the monopolist actually takes away a portion of the consumer surplus.

Question

The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
  D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-By discriminating between the consumers, the monopolist actually takes away a portion of the consumer surplus.

Quizplus · Accepted Answer

When a monopolist discriminates between consumers, they can charge higher prices to consumers who are willing to pay more, thus capturing a portion of their surplus. This decreases the overall consumer surplus in the market.

The Figure Given Below Shows the Cost and Revenue Curves