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Figure: Monopoly Markup
-(Figure: Monopoly Markup) Refer to the figure. Consumer surplus under monopoly is represented by:
A) triangle abc.
B) triangle cef.
C) square bcde.
D) triangle adf.

Question

Use the following to answer questions:
Figure: Monopoly Markup 
-(Figure: Monopoly Markup) Refer to the figure. Consumer surplus under monopoly is represented by:
A) triangle abc. 
B) triangle cef. 
C) square bcde. 
D) triangle adf.

Quizplus · Accepted Answer

The area of triangle abc represents consumer surplus under monopoly, which is the difference between what consumers are willing to pay (as indicated by the demand curve) and what they actually have to pay (as indicated by the price set by the monopolist). Therefore, the correct answer is A. The other areas in the figure represent the monopolist's profit and deadweight loss.

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