In a monopolized market,the deadweight loss is calculated as:
A) the difference between the value of a good to consumers (measured by the price they would be willing to pay for the good)and the price they actually must pay to obtain the good.
B) the difference between the cost to producers of producing a good (measured by the minimum price at which they would sell a given quantity of the good)and the price they actually receive in the market.
C) the difference between total surplus in a competitive market and total surplus in a monopolized market.
D) the equilibrium at which scarce societal resources are allocated to the production of various goods and services up to the point where the cost of the resources equals the benefit society reaps from their use.

Question

Quizplus · Accepted Answer

Deadweight loss in a monopolized market is the reduction in total surplus (consumer surplus + producer surplus) compared to what would have been achieved in a competitive market. This is because the monopolist restricts output and sets a higher price than would have been set in a competitive market, resulting in less consumer surplus and less producer surplus. The deadweight loss represents the loss of potential gains from trade that would have occurred if the market were competitive.

In a Monopolized Market,the Deadweight Loss Is Calculated As