Refer to the accompanying figure to answer the following questions.

-Consumer surplus associated with a profit-maximizing monopoly is equal to
A) $900.
B) $600.
C) $300.
D) $100.
E) $450.

Question

Refer to the accompanying figure to answer the following questions.
 
-Consumer surplus associated with a profit-maximizing monopoly is equal to
A) $900. 
B) $600. 
C) $300. 
D) $100. 
E) $450.

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum amount a consumer is willing to pay for a good or service and the actual price they pay. In this case, the demand curve shows that consumers would be willing to pay a total of $1200 for the six units of the monopoly's output. However, the monopoly charges a price of $900, so the consumer surplus is $300 ($1200 - $900).

Refer to the Accompanying Figure to Answer the Following Questions