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-(Table: Prices and Demand) Look at the table Prices and Demand. The New Orleans Saints have a monopoly on Saints logo hats. The marginal cost of producing a hat is $18. If the Saints were a perfectly competitive firm in a perfectly competitive industry, at their profit-maximizing price and output deadweight loss would be:
A) $0.
B) $12.
C) $18.
D) $24.

Question

Use the following to answer questions: 
-(Table: Prices and Demand) Look at the table Prices and Demand. The New Orleans Saints have a monopoly on Saints logo hats. The marginal cost of producing a hat is $18. If the Saints were a perfectly competitive firm in a perfectly competitive industry, at their profit-maximizing price and output deadweight loss would be:
A) $0. 
B) $12. 
C) $18. 
D) $24.

Quizplus · Accepted Answer

In a perfectly competitive market, firms produce where price equals marginal cost, eliminating deadweight loss. Since the marginal cost is $18, the price would also be $18, resulting in no deadweight loss.

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