Figure 13.5

Figure 13.5 shows the demand and cost curves for a monopolist.
-Refer to Figure 13.5.What is the difference between the monopoly's price and perfectly competitive industry's price?
A)The monopoly's price is higher by $9.50.
B)The monopoly's price is higher by $13.
C)The monopoly's price is higher by $3.50.
D)The monopoly's price is higher by $21.

Question

Figure 13.5
  
Figure 13.5 shows the demand and cost curves for a monopolist.
-Refer to Figure 13.5.What is the difference between the monopoly's price and perfectly competitive industry's price?
A)The monopoly's price is higher by $9.50. 
B)The monopoly's price is higher by $13. 
C)The monopoly's price is higher by $3.50. 
D)The monopoly's price is higher by $21.

Quizplus · Accepted Answer

The monopoly's price is $22.50, while in a perfectly competitive industry the price would be $9.50. Therefore, the difference between the monopoly's price and perfectly competitive industry's price is $13.

Figure 13.5 Figure 13.5 Shows the Demand and Cost Curves for a and Cost