A small town is served by many competing supermarkets, which all have the same constant marginal cost.

Use the black point (plus symbol) to show the competitive price and quantity in this market. Then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus.

Now suppose that the independent supermarkets combine into one chain.

Use the black point (plus symbol) to show the profit-maximizing monopoly outcome. Then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus. Finally, use the black area (plus symbol) to shade the area representing deadweight loss.

  

(? Competitive Market Demand Competitive Outcome A Consumer Surplus Marginal Cost Producer Surplus Quantity of Groceries Price, Cost, Revenue