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Graphical Analysis, Intuition In Figure 5.2, loss to steel firm of moving to Q is shaded triangle dcg This is the area between the mb and mPc curve going from Q1 to Q Fishery gains by an amount abfe This is the area under the Md curve going from Q, to Q. By construction, this equals area cdg Difference between fishery's gain and steel firms loss is the efficiency loss from producing Q, instead of Q11 Graphical Analysis, Intuition • In Figure 5.2, loss to steel firm of moving to Q* is shaded triangle dcg. – This is the area between the MB and MPC curve going from Q1 to Q* . • Fishery gains by an amount abfe. – This is the area under the MD curve going from Q1 to Q* . By construction, this equals area cdhg. • Difference between fishery’s gain and steel firm’s loss is the efficiency loss from producing Q1 instead of Q*
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