Refer to the information provided in Figure 13.12 below to answer the questions that follow. Figure 13.12
-Refer to Figure 13.12. Suppose a monopolist faces the demand and costs in the figure and is able to perfectly price discriminate. What is the economic welfare loss from having a monopoly instead of a perfectly competitive industry supplying widgets?
A) $0
B) $4,000
C) $16,000
D) Indeterminate from the given information.

Question

Refer to the information provided in Figure 13.12 below to answer the questions that follow.  Figure 13.12
-Refer to Figure 13.12. Suppose a monopolist faces the demand and costs in the figure and is able to perfectly price discriminate. What is the economic welfare loss from having a monopoly instead of a perfectly competitive industry supplying widgets?
A) $0 
B) $4,000 
C) $16,000 
D) Indeterminate from the given information.

Quizplus · Accepted Answer

When a monopolist perfectly price discriminates, it captures all consumer surplus as profit, but the quantity produced is the same as in a perfectly competitive market. Therefore, there is no deadweight loss, and economic welfare loss is $0.

Refer to the Information Provided in Figure 13