Author Question: Refer to Figure 15-14. From the monopoly graph above, identify the following: a. The profit ... (Read 27 times)

frankwu · **on:** Jun 29, 2018

Refer to Figure 15-14. From the monopoly graph above, identify the following:

a. The profit maximizing price
b. The profit maximizing quantity
c. The area representing deadweight loss
d. The area representing the transfer of consumer surplus to the monopoly

Question 2

Caroline is an artist. She purchases canvas, paints, brushes, and accessories for 75. She sells one of her original paintings to an art gallery for 1,500, even though an art lover would pay 4,500 for that painting.

How much value does Caroline add?
A) 75 B) 1,425 C) 1,500 D) 4,425

ASDFGJLO · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

a. Price = P3
b. Quantity = Q1
c. Deadweight loss = area C + D
d. Transfer of consumer surplus to the monopoly = area A

Answer to Question 2

B