Sandy Cove Resort is a single-price monopoly and the only beach activity it offers is jet ski rides. The graph shows the marginal cost of a jet ski ride and the demand for jet ski rides. On the graph draw the resort's marginal revenue curve. Label it MR. Draw a shape to show the consumer surplus that is redistributed from consumers to the resort as a result of the market being a single-price monopoly rather than perfectly competitive. Label it 1. Draw a shape to show the deadweight loss created. Label it 2.
Sandy Cove Resort is a single-price monopoly and the only beach activity it offers is jet ski rides. The graph shows the marginal cost of a jet ski ride and the demand for jet ski rides. On the graph draw the resort's marginal revenue curve. Label it MR. Draw a shape to show the consumer surplus that is redistributed from consumers to the resort as a result of the market being a single-price monopoly rather than perfectly competitive. Label it 1. Draw a shape to show the deadweight loss created. Label it 2.
Chapter9: Monopoly
Section: Chapter Questions
Problem 6SQP
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