The following figure shows the revenue and cost curves of a monopolist.

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

Question

The following figure shows the revenue and cost curves of a monopolist.
 
-Refer to the figure above.The consumer surplus in this market is ________,while the consumer surplus in the competitive circumstance would have been ________.

Quizplus · Accepted Answer

Consumer surplus is the area above the price level and below the demand curve. In a monopolistic market, the price is higher and quantity lower than in a competitive market, leading to a smaller consumer surplus. The correct calculation involves finding the areas of the respective triangles (or trapezoids, depending on the graph not shown here) for both the monopolistic and competitive scenarios.

The Following Figure Shows the Revenue and Cost Curves of a Monopolist