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Welcome to the Q&A for ECN/APEC 2010, where you can ask questions and receive answers from your fellow students, the TA, and your professor.

Please only ask questions about the material for the course. Try to create discussions about the material we see in class, instead of just thinking of economics in general (this is an introduction to microeconomics class, not a policy or government class).

For questions and discussions about course organization or other course related topics, come see us after class or during office hours.

Feel free to discuss quiz questions on the Q&A, but do not provide direct answers to quiz questions before the quiz's due date.

Consumer Surplus in Monopoly

+1 vote
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Calculate the change in consumer surplus from an unregulated monopoly to a (optimally) regulated monopoly.

asked Apr 29 by canvas-e25408d8f8d15 (216 points)

1 Answer

+1 vote
The difference in the 2 consumer surpluses is where the bottom right corner of the triangle is and then you just calculate the area for the area respectively:

The one where its regulated is at [70,7] or where AC and demand meet. This is also the farthest the company can go without sustaining a loss. (.5x70x7)

But if its at the profit maximization point then the bottom right corner is at [50,9] this is where the company is the most profitable or where MR=MC and then just continue up to the demand curve and that's where the bottom corner is (.5x50x5)
answered May 1 by canvas-946e15a61c43e (150 points)
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