The following figure shows the marginal revenue curve [MR],the demand curve,and the marginal cost curve [MC] for a monopolist with constant costs.
Figure 15-2
-Suppose that the market in Figure 15-2 were served by an oligopoly such that the equilibrium output was 450.Then the welfare loss under oligopoly would be _____ percent of that under monopoly.
A)400
B)100
C)75
D)25

Question

The following figure shows the marginal revenue curve [MR],the demand curve,and the marginal cost curve [MC] for a monopolist with constant costs.
Figure 15-2 
-Suppose that the market in Figure 15-2 were served by an oligopoly such that the equilibrium output was 450.Then the welfare loss under oligopoly would be _____ percent of that under monopoly.
A)400 
B)100 
C)75 
D)25

Quizplus · Accepted Answer

In an oligopoly, the welfare loss is less than in a monopoly because the output is higher (450 units in this case). If the welfare loss under monopoly is considered 100%, then the welfare loss under oligopoly would be reduced, making it 25% of the monopoly's welfare loss.

The Following Figure Shows the Marginal Revenue Curve [MR],the Demand