1. Using the figure above, the producer net gains equal:A) area A.B) area A – BC) area A – CD) area A + C2. Using the figure above, the loss of consumer surplus equals:A) area A.B) area A – BC) area A + BD) area A + B + C ### Diagram Explanation for Educational WebsiteThis graph illustrates various economic concepts related to pricing, cost, and revenue, commonly used in microeconomics.#### Axes- **Vertical Axis ($/Q)**: Represents price and cost per unit.- **Horizontal Axis (Quantity)**: Represents the quantity of goods or services.#### Curves- **MC (Marginal Cost)**: The curve that typically slopes upwards, representing the cost incurred from producing one more unit of a good or service. It intersects the MR curve at point B.- **AR (Average Revenue)**: This curve usually coincides with the demand curve, showing the average revenue received per unit sold.- **MR (Marginal Revenue)**: This downward-sloping curve indicates the additional revenue gained from selling one more unit.#### Points and Areas- **Point B**: The intersection of the MC and MR curves. It indicates the equilibrium output level, where marginal cost equals marginal revenue.- **Point C**: Indicates a lower output level where the costs might exceed revenues if production were at this level.- **Point A**: Shows the price and quantity combination in a different market scenario where different market conditions apply.#### Zones- **A**: The shaded rectangle represents a potential area of economic surplus or profit, illustrating the difference between revenue at price P2 and the cost at the lower level P1, for the quantity Q1.- **Price Levels (P1 and P2)**: These horizontal lines represent two different price and cost levels. P2 is higher than P1, indicating various market scenarios or pricing strategies.This diagram is crucial for understanding how firms determine optimal pricing and production strategies, as well as how different costs and revenues interact to influence economic decisions.

Producer net gains : It is equal to the difference between the price received and the seller's cost.…

. Using the figure above, the producer net gains equal: A) area A. B) area A – B C) area A – C D) area A + C 2. Using the figure above, the loss of consumer surplus equals: A) area A. B) area A – B C) area A + B D) area A + B + C

. Using the figure above, the producer net gains equal: A) area A. B) area A – B C) area A – C D) area A + C 2. Using the figure above, the loss of consumer surplus equals: A) area A. B) area A – B C) area A + B D) area A + B + C

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter9: Monopoly

Section9.4: Comparing Monopoly And Perfect Competition

Problem 1YTE

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Question

1. Using the figure above, the producer net gains equal:
A) area A.
B) area A – B
C) area A – C
D) area A + C

2. Using the figure above, the loss of consumer surplus equals:
A) area A.
B) area A – B
C) area A + B
D) area A + B + C

### Diagram Explanation for Educational Website

This graph illustrates various economic concepts related to pricing, cost, and revenue, commonly used in microeconomics.

#### Axes
- **Vertical Axis ($/Q)**: Represents price and cost per unit.
- **Horizontal Axis (Quantity)**: Represents the quantity of goods or services.

#### Curves
- **MC (Marginal Cost)**: The curve that typically slopes upwards, representing the cost incurred from producing one more unit of a good or service. It intersects the MR curve at point B.
- **AR (Average Revenue)**: This curve usually coincides with the demand curve, showing the average revenue received per unit sold.
- **MR (Marginal Revenue)**: This downward-sloping curve indicates the additional revenue gained from selling one more unit.

#### Points and Areas
- **Point B**: The intersection of the MC and MR curves. It indicates the equilibrium output level, where marginal cost equals marginal revenue.
- **Point C**: Indicates a lower output level where the costs might exceed revenues if production were at this level.
- **Point A**: Shows the price and quantity combination in a different market scenario where different market conditions apply.

#### Zones
- **A**: The shaded rectangle represents a potential area of economic surplus or profit, illustrating the difference between revenue at price P2 and the cost at the lower level P1, for the quantity Q1.
- **Price Levels (P1 and P2)**: These horizontal lines represent two different price and cost levels. P2 is higher than P1, indicating various market scenarios or pricing strategies.

This diagram is crucial for understanding how firms determine optimal pricing and production strategies, as well as how different costs and revenues interact to influence economic decisions.

Consumer’s gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price and up to the equilibrium quantity. Consumer surplus is represented by area A.

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