The following figure shows the downward sloping demand and marginal revenue [MR] curves and the upward sloping marginal cost [MC] curve of a monopolist.
Figure 12-2
-Refer to Figure 12-2.Compared to perfect competition,monopoly pricing introduces efficiency loss equal to the area:
A)VWE.
B)ZVN.
C)HEF.
D)JHFK.

Question

The following figure shows the downward sloping demand and marginal revenue [MR] curves and the upward sloping marginal cost [MC] curve of a monopolist.
Figure 12-2 
-Refer to Figure 12-2.Compared to perfect competition,monopoly pricing introduces efficiency loss equal to the area:
A)VWE. 
B)ZVN. 
C)HEF. 
D)JHFK.

Quizplus · Accepted Answer

Efficiency loss under monopoly is represented by the deadweight loss, which is the area between the demand curve and the marginal cost curve, and to the left of the monopoly quantity. In this figure, it is the triangle HEF. Therefore, the answer is C.

The Following Figure Shows the Downward Sloping Demand and Marginal