The deadweight loss associated with a monopoly occurs because the monopolist
A)maximizes profits.
B)produces an output level less than the socially optimal level.
C)produces an output level greater than the socially optimal level.
D)equates marginal revenue with marginal cost.

Question

Quizplus · Accepted Answer

The deadweight loss in a monopoly occurs because the monopolist restricts output to raise prices, producing less than the socially optimal level of output where marginal cost equals marginal benefit. This results in a loss of economic efficiency.

The Deadweight Loss Associated with a Monopoly Occurs Because the Monopolist