Use the figure below to answer the following questions.

Figure 13.3.3
-Consider the revenue and cost curves in Figure 13.3.3. What is the difference in producer surplus between a single-price monopoly and a perfectly competitive market?
A)EADH
B)EABH
C)ABD
D)ACD
E)EABH - BCD

Question

Use the figure below to answer the following questions.
  
Figure 13.3.3
-Consider the revenue and cost curves in Figure 13.3.3. What is the difference in producer surplus between a single-price monopoly and a perfectly competitive market?
A)EADH 
B)EABH 
C)ABD 
D)ACD 
E)EABH - BCD

Quizplus · Accepted Answer

In a perfectly competitive market, producer surplus is the area above the supply curve and below the price level, which is EABH. In a monopoly, the producer surplus is the area above the marginal cost curve and below the monopoly price, which is EABH minus the area BCD. Thus, the difference is EABH - BCD.

Use the Figure Below to Answer the Following Questions