Use the following figure to answer the question : Figure 12-1 : shows the downward sloping demand and marginal revenue [MR] curves of a monopolist. The MR curve intersects the marginal cost [MC] curve at point B. MC is constant at the P₁.

-Refer to Figure 12-1. If the monopolist cannot price discriminate, consumer surplus will be _____.

Question

Use the following figure to answer the question : Figure 12-1 : shows the downward sloping demand and marginal revenue [MR] curves of a monopolist. The MR curve intersects the marginal cost [MC] curve at point B. MC is constant at the P₁.

-Refer to Figure 12-1. If the monopolist cannot price discriminate, consumer surplus will be _____.

Quizplus · Accepted Answer

Consumer surplus is the area below the demand curve and above the price line. If the monopolist cannot price discriminate, it will charge a single price for all units of output. This price will be equal to P2, which is the price that maximizes the monopolist's profit. At this price, consumer surplus will be equal to P3AP2.

Use the Following Figure to Answer the Question : Figure