The diagram depicts a competitive industry with constant marginal and average costs. In equilibrium, its output is OQC and its price is OPC. A sequence of horizontal mergers produces economies of scale and results in a monopoly within the industry. The revised equilibrium output is OQM and the price is OPM. Which area shows the producer surplus after these mergers?
- AW
- BW + X
- CW + X – Z
- DX