Use the following figure to answer the question : Figure 12-2 : shows the downward sloping demand and marginal revenue [MR] curves and the upward sloping marginal cost [MC] curve of a monopolist.
-Refer to Figure 12-2.With perfect price discrimination,the monopolist will receive producer surplus equal to the area:
A)ACFH.
B)BCFH.
C)AVFH.
D)AWEH.

Question

Use the following figure to answer the question : Figure 12-2 :  shows the downward sloping demand and marginal revenue [MR] curves and the upward sloping marginal cost [MC] curve of a monopolist. 
-Refer to Figure 12-2.With perfect price discrimination,the monopolist will receive producer surplus equal to the area:
A)ACFH. 
B)BCFH. 
C)AVFH. 
D)AWEH.

Quizplus · Accepted Answer

With perfect price discrimination, a monopolist charges each consumer the maximum they are willing to pay, effectively capturing the entire area under the demand curve down to the cost curve as producer surplus. Therefore, the area representing producer surplus is AVFH, as it encompasses the entire area above the average cost curve and below the demand curve, from the quantity axis up to the highest price a consumer is willing to pay.

Use the Following Figure to Answer the Question : Figure