Figure 15-12

Figure 15-12 shows the cost and demand curves for a monopolist.
-Refer to Figure 15-12.Assume the firm maximizes its profits.What is the amount of consumer surplus?
A)$21
B)$124
C)$186
D)$332

Question

Figure 15-12
  
Figure 15-12 shows the cost and demand curves for a monopolist.
-Refer to Figure 15-12.Assume the firm maximizes its profits.What is the amount of consumer surplus?
A)$21 
B)$124 
C)$186 
D)$332

Quizplus · Accepted Answer

The consumer surplus is the difference between the total amount consumers are willing to pay for a good and the amount they actually pay. In this case, the total amount consumers are willing to pay is $332 (the area under the demand curve), and the amount they actually pay is $146 (the area under the supply curve). Therefore, the consumer surplus is $332 - $146 = $186.

Figure 15-12 Figure 15-12 Shows the Cost and Demand Curves for a and Demand