Answered: For a monopolist with linear demand…

For a monopolist with linear demand curve and constant marginal costs, show that the consumer surplus is equal to the DWL.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter13: Monopoly And Antitrust

Section: Chapter Questions

Problem 5P

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Question

10 For a monopolist with linear demand curve and constant marginal costs, show that the consumer surplus is equal to the DWL.

Consumer’s gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price and up to the equilibrium quantity. Consumer surplus is represented by area A.

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