Refer to Figure 16-5. Suppose the firm represented in the diagram decides to act as a monopolist and charge a single price. What is the profit maximizing quantity produced and what is the price charged?

Normative analysis involves value judgments

Indicate whether the statement is true or false

Assume the market was in equilibrium in the graph shown. If the market price gets set to $7, which of the following is true?

A. Some producers gain surplus, but total surplus falls.
B. Some producers lose surplus, but total surplus rises.
C. Some consumers gain surplus, but total surplus falls.
D. Some consumers lose surplus, but total surplus rises.