(Figure: The Profit-Maximizing Output and Price in the Monopoly Diamond Market) Use Figure: The Profit-Maximizing Output and Price in the Monopoly Diamond Market. Assume that there are no fixed costs and that AC = MC = $200. If this were a perfectly competitive industry, consumer surplus would be: Price, cost, marginal revenue of diamond $1,000 800 600 400 200 0 -200 -400 $1,400 $3,200 $0 $6,400 B LA 8 10 MR C MC D 16 20 Quantity of diamonds

(Figure: The Profit-Maximizing Output and Price in the Monopoly Diamond Market) Use Figure: The Profit-Maximizing Output and Price in the Monopoly Diamond Market. Assume that there are no fixed costs and that AC = MC = $200. If this were a perfectly competitive industry, consumer surplus would be: Price, cost, marginal revenue of diamond $1,000 800 600 400 200 0 -200 -400 $1,400 $3,200 $0 $6,400 B LA 8 10 MR C MC D 16 20 Quantity of diamonds

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 4
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Explain with the use of examples the difference between the following concepts:producer surplus and economic profit
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Question 2
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