The social cost of a monopoly is equal to its
A)economic profit.
B)fixed cost.
C)deadweight loss.
D)variable cost.

Question

Quizplus · Accepted Answer

The social cost of a monopoly is equal to its deadweight loss, which represents the inefficiency introduced by the monopoly setting prices above marginal cost, leading to reduced output and higher prices than in a competitive market. This results in a loss of consumer and producer surplus that is not transferred to the monopolist, hence a net loss to society.

The Social Cost of a Monopoly Is Equal to Its