Use the figure below to answer the following questions. Figure 12.3.3
-Consider Figure 12.3.3.Which area indicates the difference in producer surplus between a single-price monopoly and a perfectly competitive market?
A)EADH
B)EABH
C)ABD
D)ACD
E)EABH - BCD

Question

Use the figure below to answer the following questions.  Figure 12.3.3
-Consider Figure 12.3.3.Which area indicates the difference in producer surplus between a single-price monopoly and a perfectly competitive market?
A)EADH 
B)EABH 
C)ABD 
D)ACD 
E)EABH - BCD

Quizplus · Accepted Answer

The area EABH represents the deadweight loss caused by the monopoly controlling the market and restricting output to increase profits. The area BCD represents the consumer surplus that is lost due to the monopoly's pricing strategy. Therefore, the difference in producer surplus between a single-price monopoly and a perfectly competitive market is the triangle EABH minus the triangle BCD.

Use the Figure Below to Answer the Following Questions