. A small town is served by many competing supermarkets, which have the same constant marginal cost. a. Using a diagram of the market for groceries,
show the consumer surplus, producer
surplus, and total surplus. b. Now suppose that the independent super
markets combine into one chain. Using a new diagram, show the new consumer surplus, producer surplus, and total surplus. Relative to the competitive market, what is the transfer from consumers to producers? What is the
deadweight loss