Multiple Choice
The following figure shows the demand (D) , marginal revenue (MR) , and marginal cost (MC) curves for a monopolist.
![The following figure shows the demand (D) , marginal revenue (MR) , and marginal cost (MC) curves for a monopolist. -Refer to the figure above.The monopolist is forced to charge the competitive price,but the government agreed to compensate the monopolist for its loss in producer surplus,in comparison to the profit-maximizing outcome.What is the amount of compensation per unit of output traded? A) (Q₃ Q₁) (P₁ P₄) /2 Q₃ B) [(P₁ P₃) Q₁ - (Q₃ Q₁) (P₃ P₄) /2]/2 C) (Q₃ Q₁) (P₁ P₃) /2 Q₁ D) (P₁ P₃) [Q₁ + (Q₃ Q₁) /2]/Q₃](https://d2lvgg3v3hfg70.cloudfront.net/TB1360/11ea4371_c20b_7f3e_8ca6_154eacdc1bd0_TB1360_00_TB1360_00.jpg)
-Refer to the figure above.The monopolist is forced to charge the competitive price,but the government agreed to compensate the monopolist for its loss in producer surplus,in comparison to the profit-maximizing outcome.What is the amount of compensation per unit of output traded?
A) (Q₃ Q₁) (P₁ P₄) /2 Q₃
B) [(P₁ P₃) Q₁ - (Q₃ Q₁) (P₃ P₄) /2]/2
C) (Q₃ Q₁) (P₁ P₃) /2 Q₁
D) (P₁ P₃) [Q₁ + (Q₃ Q₁) /2]/Q₃
Correct Answer:
Verified
Correct Answer:
Verified
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