The figure below shows the revenue and cost curves for a profit-maximizing monopolist. Based on the figure, in perfect competition, total welfare is denoted by the area _____.FIGURE 8-7
A)a + b + c
B)d + e
C)a + b + c + d + e
D)a + b + d
E)c + e

Question

The figure below shows the revenue and cost curves for a profit-maximizing monopolist. Based on the figure, in perfect competition, total welfare is denoted by the area _____.FIGURE 8-7​ 
A)a + b + c 
B)d + e 
C)a + b + c + d + e 
D)a + b + d 
E)c + e

Quizplus · Accepted Answer

In perfect competition, total welfare is given by consumer surplus plus producer surplus, which is the total area under the demand curve and above the supply curve. In the figure, this is the area given by a + b + c + d + e. Therefore, the correct answer is C.

The Figure Below Shows the Revenue and Cost Curves for a Profit-Maximizing