The following figure shows the downward sloping demand and marginal revenue [MR] curves and the upward sloping marginal cost [MC] curve of a monopolist.
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. 
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 in a monopoly is represented by the deadweight loss triangle, which is the triangle between the demand curve, marginal cost curve, and the monopolist's quantity produced. In this case, the deadweight loss triangle is HEF, which represents the efficiency loss introduced by monopoly pricing. Therefore, the correct answer is C.

The Following Figure Shows the Downward Sloping Demand and Marginal