What is the loss of consumer surplus under monopoly outcomes versus efficient ou

Question

What is the loss of consumer surplus under monopoly outcomes versus efficient outcomes?

e The Figure Below Presents T | O (17) Micro 4.1 Monopoly De e Chegg Study I Guided Solut | + esii Assignments:ECON200-01C Connect tientunnecLmheducaliun.com/liow/urriechtml Find on page oss of consumer × No results Optinns PS Chapter 14 Help Save & Exit Submit You received partial credit in the previous attempt. Check my work View previous attempt 3 The figuie below presents the ded curve, marginal revenue, and marginal costs facing a monopolist pioduce 10 Price (S) Tools CS 35 30 25 15 10 MR 12 3 45 67 89 10 11 Dell Update updates ate reaty ta install Rerind rme later Type here to search 1214/2017

Explanation / Answer

Answer

efficient outcome is at MC=P

where

P=27.5 and Q=4.5

CS=0.5*(50-27.5)*4.5=50.62500

whereas monopoly produces at MR=MC

where

P=35 and Q=3

CS=0.5*(50-35)*3

=22.5

the loss of CS=50.62500-22.5=$28.12500

the loss of CS is $28.125

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