Question

The imposition of a price ceiling equal to P1 will cause consumer surplus to , and total surplus to A. rise by Area C+F−G; fall by Area C; rise by Area F+G B. rise by Area C+F+G+H; fall by Area C; rise by Area G+H C. rise by Area C; fall by Area C+F; fall by Area F D. rise by Area C−E; fall by Area C+F; fall by Area E+F The diagram below shows the demand curve for a monopoly and the cost curves for a single firm. Suppose this firm is being regulated using a policy of average-cost pricing. In this case, the firm would experience represented by the area A. profits; edbc B. losses; edbc C. profits; P2P3 ad D. no losses, no profits; - E. losses; 0P2bQ2 The diagram shows cost and revenue curves for a natural monopoly producing electricity. Price is dollars per kilowatt hour and quantity is kilowatt hours per day. Suppose this firm is being regulated using a pricing policy of marginal-cost pricing. In this case, economic profits are equal to

A. −$27,000
B. $0.
C. −$52,000.
D. −$64,000.
E. $80,000.

Answer 1

A price ceiling equal to P1 will cause consumer surplus to fall by Area C and total surplus to rise by Area F+G.

Step-by-step explanation:

The imposition of a price ceiling equal to P1 will cause consumer surplus to fall by Area C, and total surplus to rise by Area F+G.