FIGURE 12- 3
-Refer to Figure 12- 3. Comparing the perfectly competitive equilibrium to the monopoly equilibrium, the reduction in consumer surplus due to monopoly is outlined by
A) P2P3E.
B) BCE.
C) P2EP4.
D) P2ECP3.
E) q1CEq2.

Question

FIGURE 12- 3
-Refer to Figure 12- 3. Comparing the perfectly competitive equilibrium to the monopoly equilibrium, the reduction in consumer surplus due to monopoly is outlined by
A) P2P3E. 
B) BCE. 
C) P2EP4. 
D) P2ECP3. 
E) q1CEq2.

Quizplus · Accepted Answer

In a monopoly, the price is higher and the quantity is lower compared to a perfectly competitive market. The reduction in consumer surplus is represented by the area between the monopoly price and the competitive price over the range of quantities sold, which is outlined by P2ECP3.

FIGURE 12- 3 -Refer to Figure 12- 3. Comparing the Perfectly Competitive Equilibrium