Market Diagram

The following questions refer to the accompanying market diagram. PC and QC are the equilibrium price and quantity if the firm behaves competitively, and PM and QM are the equilibrium price and quantity if the firm is a simple monopoly.

-Refer to the market diagram.Of the surplus that consumers lose because there is a monopoly (and not perfect competition),how much is lost to the monopoly itself?
A) Area C + D
B) Area E + H
C) Area A + B
D) Area C + D + E

Question

Market Diagram

The following questions refer to the accompanying market diagram. PC and QC are the equilibrium price and quantity if the firm behaves competitively, and PM and QM are the equilibrium price and quantity if the firm is a simple monopoly.

-Refer to the market diagram.Of the surplus that consumers lose because there is a monopoly (and not perfect competition),how much is lost to the monopoly itself?
A) Area C + D 
B) Area E + H 
C) Area A + B 
D) Area C + D + E

Quizplus · Accepted Answer

The surplus that consumers lose is represented by areas A+B+C+D+E, while the surplus gained by the monopoly is represented by areas C+D. Therefore, the amount lost to the monopoly itself is area C+D.

Market Diagram The Following Questions Refer to the Accompanying Market Diagram. PC