-The figure shows the demand for and costs of producing Charlene's Chocolates. If Charlene's Chocolates is a monopoly and charges one price to all customers, then the consumer surplus is
A) $400.
B) $900.
C) $0.
D) $200.

Question

-The figure shows the demand for and costs of producing Charlene's Chocolates. If Charlene's Chocolates is a monopoly and charges one price to all customers, then the consumer surplus is
A) $400. 
B) $900. 
C) $0. 
D) $200.

Quizplus · Accepted Answer

Consumer surplus is the difference between the price consumers are willing to pay for a good and the price they actually pay. In this case, the demand curve shows that consumers are willing to pay up to $10 per box of chocolates. However, the monopoly is charging a price of $8 per box. Therefore, the consumer surplus is $10 - $8 = $2 per box. Since the monopoly is selling 200 boxes of chocolates, the total consumer surplus is $2 x 200 = $400.

-The Figure Shows the Demand for and Costs of Producing