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Figure: The Profit-Maximizing Output and Price
-(Figure: The Profit-Maximizing Output and Price)Use Figure: The Profit-Maximizing Output and Price.Assume that there are no fixed costs and AC = MC = $200.At the profit-maximizing output and price for a monopolist,deadweight loss is:
A)$3,200.
B)$6,400.
C)$1,000.
D)$1,600.

Question

Use the following to answer question:
Figure: The Profit-Maximizing Output and Price 
-(Figure: The Profit-Maximizing Output and Price)Use Figure: The Profit-Maximizing Output and Price.Assume that there are no fixed costs and AC = MC = $200.At the profit-maximizing output and price for a monopolist,deadweight loss is:
A)$3,200. 
B)$6,400. 
C)$1,000. 
D)$1,600.

Quizplus · Accepted Answer

Deadweight loss in a monopoly is calculated as the area of the triangle formed between the demand curve and the marginal cost curve, from the profit-maximizing quantity to the socially optimal quantity. Given the information, the deadweight loss is $1,600.

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