Let's calculate consumer surplus, producer surplus, and total surplus

in the case of a monopolist and in the case of the perfectly competitive firm.

Consumer surplus is the area underneath the demand curve and above the price.

So in this case, it's the height, 150-100, times the base,

which is 50 divided by 2, and we get that it's 1250.

Producer surplus is slightly more complicated.

It's a trapezoid.

It is the area underneath the price and

above the marginal cost curve, up to the monopolist output.

And an area of a trapezoid, it's this, which is 100, plus this,

which is 50, times the base, which is 50, divided by 2.

So we get (100+50)50,

divided by 2, and this is 3750.

Total surplus is the sum of the two, so adding 1250 and

3750, we get a total surplus that is equal to 5000.

And if we're measuring this in dollars, this would be $5,000.

What about the perfectly competitive environment?

Consumer surplus of course will be larger, again, because the price is lower and

the quantity is bigger, it will be this bigger triangle here.

And we can find this area, it's the height 75 times the base,

which is 75, divided by 2, and

we get 75 times 75 divided by 2, which is 2812.5.