The surplus transferred from consumers to the monopolist is the shaded area between the price line and the demand curve under monopoly (blue triangle) minus that under perfect competition (green triangle). This area represents the additional profit the monopolist earns due to its pricing power.
The question is asking how much surplus is transferred from consumers to the monopolist in the graph.
To answer this question, we need to calculate the difference between the consumer surplus under perfect competition and the consumer surplus under monopoly.
The consumer surplus under perfect competition is the area under the demand curve above the equilibrium price. The consumer surplus under monopoly is the area under the demand curve above the monopoly price.
The difference between these two areas is the surplus that is transferred from consumers to the monopolist.
To calculate this difference, we can use the following formula:
Surplus transferred = Consumer surplus under perfect competition - Consumer surplus under monopoly
From the graph, we can see that the consumer surplus under perfect competition is the area of the triangle PAB. The consumer surplus under monopoly is the area of the triangle PCM.
Therefore, the surplus transferred from consumers to the monopolist is the area of the triangle MAB:
Surplus transferred = Area of triangle PAB - Area of triangle PCM
Surplus transferred = 1/2 * (P - B) * Q - 1/2 * (M - P) * Q
Surplus transferred = 1/2 * Q * (P - B - M)
where:
* P is the perfect competition price
* B is the marginal cost
* M is the monopoly price
* Q is the equilibrium quantity
From the graph, we can see that the following values apply:
* P = 12
* B = 6
* M = 10
* Q = 8
Substituting these values into the formula above, we get:
Surplus transferred = 1/2 * 8 * (12 - 6 - 10)
Surplus transferred = 8
Therefore, the surplus transferred from consumers to the monopolist in the graph is 8.
Alternatively, we can see from the graph that the surplus transferred from consumers to the monopolist is equal to the area of the rectangle MPBA. This rectangle has a height of (M - B) and a base of Q. Therefore, the area of the rectangle is equal to (M - B) * Q. Substituting the values of M, B, and Q above, we get:
Surplus transferred = (10 - 6) * 8 = 8
Therefore, the surplus transferred from consumers to the monopolist in the graph is 8.