Use the following to answer questions 36-37:
Figure 9.7
-(Figure 9.7) The levels of consumer surplus under monopoly and perfect competition are _____ and _____, respectively.

Question

Use the following to answer questions 36-37:
Figure 9.7 
-(Figure 9.7) The levels of consumer surplus under monopoly and perfect competition are _____ and _____, respectively.

Quizplus · Accepted Answer

As shown in Figure 9.7, the consumer surplus under perfect competition is the area of the triangle above the market price and below the demand curve, which equals ($20 - $10)×(250 - 100)/2 = $1,500. The consumer surplus under monopoly is the area of the triangle above the market price and below the demand curve, which equals ($30 - $15)×(150 - 25)/2 = $1,125. Therefore, the difference in consumer surplus between monopoly and perfect competition is $1,500 - $1,125 = $375, which is equal to ($20 - $15) × (150 - 100)/2. Therefore, the correct answer is D, with a difference of $400 and a consumer surplus of $1,600 under monopoly.

Use the Following to Answer Questions 36-37