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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.

Paint Market 2 How do you figure out that the consumer surplus increases by $120??????

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

asked Apr 30 by canvas-45f321a83304b (225 points)

1 Answer

+1 vote
When MR meets MC, from there you go up until you reach the demand and find the consumer surplus (area) of that triangle (50x5) and that is your unregulated.

When AC meets Demand, from there you find the consumer surplus (area) of that triangle (70x7) and that is your regulated.

When you calculate the two consumer surpluses you find out that the regulated is increased by 120.
answered May 1 by canvas-db91aa5f3dea5 (156 points)
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