Figure 8-11 Figure 8-11 shows the cost and demand curves for a monopolist.
-Refer to Figure 8-11.What is the amount of consumer surplus if,instead of a monopoly,the industry was organised as a perfectly competitive industry?

Question

Figure 8-11  Figure 8-11 shows the cost and demand curves for a monopolist.
-Refer to Figure 8-11.What is the amount of consumer surplus if,instead of a monopoly,the industry was organised as a perfectly competitive industry?

Quizplus · Accepted Answer

In a perfectly competitive industry, consumer surplus is maximized because the price equals marginal cost. The consumer surplus is the area above the price level and below the demand curve, which is typically larger than in a monopoly.

Figure 8-11 Figure 8-11 Shows the Cost and Demand