Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist. At this monopolist's profit-maximizing level of output, deadweight loss equals ________.
A)$1,000
B)$2,000
C)$4,000
D)$6,000

Question

Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist.  At this monopolist's profit-maximizing level of output, deadweight loss equals ________.
A)$1,000 
B)$2,000 
C)$4,000 
D)$6,000

Quizplus · Accepted Answer

Deadweight loss is ½ × $40 × 50 = $1,000.

Suppose the Accompanying Figure Shows the Demand Curve, Marginal Revenue