2. Problems and Applications Q2 A small town is served by many competing supermarkets, which all have the same constant marginal cost. Use the black point (plus symbol) to show the competitive price and quantity in this market. Then use the green area (triangle symbol) to. area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing surplus. Competitive Market

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2. Problems and Applications Q2
A small town is served by many competing supermarkets, which all have the same constant marginal cost.
Use the black point (plus symbol) to show the competitive price and quantity in this market. Then use the green area (triangle symbol) to shade the
area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer
surplus.
Competitive Market
Demand
Competitive Outcome
Consumer Surplus
Marginal Cost
Producer Surplus
Quantity of Groceries
Price, Cost, Revenue
Transcribed Image Text:2. Problems and Applications Q2 A small town is served by many competing supermarkets, which all have the same constant marginal cost. Use the black point (plus symbol) to show the competitive price and quantity in this market. Then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus. Competitive Market Demand Competitive Outcome Consumer Surplus Marginal Cost Producer Surplus Quantity of Groceries Price, Cost, Revenue
Now suppose that the independent supermarkets combine into one chain.
Use the black point (plus symbol) to show the profit-maximizing monopoly outcome. Then use the green area (triangle symbol) to shade the area
representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer
surplus. Finally, use the black area (plus symbol) to shade the area representing deadweight loss.
Monopoly
Demand
Monopoly Outcome
Consumer Surplus
Marginal Cost
Producer Surplus
Deadweight Loss
Marginal Revenue
Quantity of Groceries
Which of the following statements is true about the changes that occur after the supermarkets merge? Check all that apply.
O Total surplus falls.
O The market quantity decreases.
O Consumer surplus falls.
O Producer surplus remains unchanged.
O The market price remains unchanged.
Price, Cost, Revenue
2)
Transcribed Image Text:Now suppose that the independent supermarkets combine into one chain. Use the black point (plus symbol) to show the profit-maximizing monopoly outcome. Then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus. Finally, use the black area (plus symbol) to shade the area representing deadweight loss. Monopoly Demand Monopoly Outcome Consumer Surplus Marginal Cost Producer Surplus Deadweight Loss Marginal Revenue Quantity of Groceries Which of the following statements is true about the changes that occur after the supermarkets merge? Check all that apply. O Total surplus falls. O The market quantity decreases. O Consumer surplus falls. O Producer surplus remains unchanged. O The market price remains unchanged. Price, Cost, Revenue 2)
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