NARRBEGIN: Exhibit 15-2
Exhibit 15-4

-In Exhibit 15-4, the consumer surplus that results from an unregulated monopoly, is shown by area

Question

NARRBEGIN: Exhibit 15-2
Exhibit 15-4
 
-In Exhibit 15-4, the consumer surplus that results from an unregulated monopoly, is shown by area

Quizplus · Accepted Answer

Consumer surplus is the difference between the price consumers are willing to pay for a good and the price they actually pay. In an unregulated monopoly, the price is set above the marginal cost, so consumers are willing to pay more for the good than they actually have to. The area between the demand curve and the price line represents the consumer surplus. In Exhibit 15-4, this area is shown by area abc.

NARRBEGIN: Exhibit 15-2 Exhibit 15-4