Exhibit 15.3

-Refer to Exhibit 15.3,which shows the cost and revenue curves for a monopolist.The consumer surplus that results if the monopoly is regulated and it charges a price equal to MC is shown by the _____

Question

Exhibit 15.3
 
-Refer to Exhibit 15.3,which shows the cost and revenue curves for a monopolist.The consumer surplus that results if the monopoly is regulated and it charges a price equal to MC is shown by the _____

Quizplus · Accepted Answer

If the monopoly is regulated and it charges a price equal to MC, it will produce quantity Q2 and charge price P2 which is lower than the profit maximizing price P1. This will result in an increase in consumer surplus, shown by the area adf.

Exhibit 15.3 -Refer to Exhibit 15.3,which Shows the Cost and Revenue Curves