Figure 15-17
-Refer to Figure 15-17. Which of the following areas represents the deadweight loss from this profit-maximizing monopolist?
A)ABE
B)BCFE
C)EFG
D)ACG

Question

Figure 15-17 
-Refer to Figure 15-17. Which of the following areas represents the deadweight loss from this profit-maximizing monopolist?
A)ABE 
B)BCFE 
C)EFG 
D)ACG

Quizplus · Accepted Answer

The deadweight loss is the loss of consumer and producer surplus that results from a market being inefficient. In this case, the monopolist is producing less output than the competitive market would, and charging a higher price. The deadweight loss is the area between the demand curve and the marginal cost curve, which is triangle EFG.

Figure 15-17 -Refer to Figure 15-17. Which of the Following Areas Represents