Question

The figure below shows the market for one hour of economics tutoring at your college. Imagine that the market for economics tutoring could be perfectly competitive, controlled by a monopolist who charges a single price or a monopolist who charges each customer a different price. Use the information in the diagram to answer the questions below.

 

How much is total surplus if the market is perfectly competitive?

How much is total surplus if the market is controlled by a single-price monopolist?

Suppose the single-price monopolist started chargin  all customers the maximum price they arewiling to pay. How much additional turplus is created?

Answer 1