Exhibit 9.16

-Refer to Exhibit 9.16,which shows the cost and revenue curves faced by a monopolist.In perfect competition,consumer surplus would be represented by _____

Question

Exhibit 9.16
 
-Refer to Exhibit 9.16,which shows the cost and revenue curves faced by a monopolist.In perfect competition,consumer surplus would be represented by _____

Quizplus · Accepted Answer

In perfect competition, consumer surplus is represented by the area above the price level and below the demand curve, up to the quantity traded. In the exhibit referenced, this would be the area aec, which combines areas a and c (above the competitive price level) and the triangle e (up to the quantity where the demand curve intersects the marginal cost curve, indicating the quantity traded in perfect competition).

Exhibit 9.16 -Refer to Exhibit 9.16,which Shows the Cost and Revenue Curves