The following figure shows the marginal revenue (MR) and average total cost (ATC) and marginal cost (MC) curves of a monopolist.

-Refer to the figure above.The consumer surplus in this market is ________,while the consumer surplus under the competitive market would have been ________.

Question

The following figure shows the marginal revenue (MR) and average total cost (ATC) and marginal cost (MC) curves of a monopolist.
 
-Refer to the figure above.The consumer surplus in this market is ________,while the consumer surplus under the competitive market would have been ________.

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 consumer surplus is $30, which is the difference between the price consumers are willing to pay ($64) and the price they actually pay ($34). Under a competitive market, the price would be lower, and the consumer surplus would be higher. In this case, the consumer surplus would have been $64, which is the difference between the price consumers are willing to pay ($64) and the price they would have paid under a competitive market ($0).

The Following Figure Shows the Marginal Revenue (MR) and Average