Refer to the accompanying figure to answer the following questions.

-The consumer surplus that is transferred to the monopolist as a result of the monopolist taking over the market is
A) $900.
B) $150.
C) $300.
D) $100.
E) $450.

Question

Refer to the accompanying figure to answer the following questions.
 
-The consumer surplus that is transferred to the monopolist as a result of the monopolist taking over the market is
A) $900. 
B) $150. 
C) $300. 
D) $100. 
E) $450.

Quizplus · Accepted Answer

The area of consumer surplus lost due to the monopolist taking over the market is represented by the triangle with a base of 6 units (the difference between the quantity demanded at the $15 price under perfect competition and the quantity demanded at the $25 price under monopoly) and a height of $50 (the difference between the maximum amount consumers are willing to pay ($100) and the price they actually pay under monopoly ($50)). The area of this triangle is (1/2)(6)(50) = $150. Therefore, the monopolist gains $150 in consumer surplus transfer.

Refer to the Accompanying Figure to Answer the Following Questions