Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist. When this monopolist maximizes its profit, consumer surplus equals the area:
A)ABJ.
B)ACN.
C)AELJ.
D)ACKJ.

Question

Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist.  When this monopolist maximizes its profit, consumer surplus equals the area:
A)ABJ. 
B)ACN. 
C)AELJ. 
D)ACKJ.

Quizplus · Accepted Answer

The monopolist will produce F units and charge a price of B. Consumer surplus is the triangular region above price and below the demand curve, to the left of the profit-maximizing level of output.

Suppose the Accompanying Figure Shows the Demand Curve, Marginal Revenue