lot 23 (0 complete) This Quiz: 23 pts This Question: 1 pt Price and cost (dolars

Question

lot 23 (0 complete) This Quiz: 23 pts This Question: 1 pt Price and cost (dolars per bottle) a Minnie's Mineral Springs is a single-price monopoly. The graph shows Minnie's demand curve, marginal revenue curve, and marginal cost curve, and the profit-maximizing price and output MC The producer surplus generated from Minnie's Mineral Springs water production and consumption is shown on the graph as Area_ OC C O D. A Area B Minnies Suppose that new wells were discovered nearby to Minnie's and Minnie's faced competition from new Choose the statement that is incorrect produce the efficient quantity of water Quanity (boties per hour) O A. Minnie's output increases B. Mnrio's economic profit decreases. O C. Minnie's charges a lower price. D. Consumers who purchase-from Minie's receive less oonsumer surplus. Click to select your answer 4 5 8 0

Explanation / Answer

Producer surplus of Minnie = area A

OPTION A

Minnie doesn't produce effecient level of output.

After facing competition, Consumers' surplus from previous monopoly seller actually increases.

Therefore, statement D is incorrect.

OPTION D

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