Answer to Question #76715 in Microeconomics for Jigar Patel

Question

The author suggests that queuing is the result of consumers enjoying having access to the restaurant when other people do not enjoy similar access; i.e. there is value from exclusivity (note: not mentioned in the extract above). Sellers therefore strategically choose to restrict the quantity supplied, while keeping prices low.
For simplicity, assume the seller is a monopoly and use an appropriate graph to show the potential gains and losses to profit if the seller chooses to restrict the quantity supplied under the ‘value from exclusivity’ assumption above.

Answer 1

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