Which of the following markets will have the largest deadweight loss?
A)a single-price monopoly
B)a perfectly competitive market
C)a perfectly price discriminating monopoly
D)a monopoly that discriminates among groups of buyers
E)a monopoly that discriminates among units of a good

Question

Quizplus · Accepted Answer

A single-price monopoly will have the largest deadweight loss because it produces less output than a perfectly competitive market, resulting in higher prices and reduced consumer surplus. Additionally, the monopoly restricts output and charges a higher price, leading to a loss of economic efficiency and deadweight loss. Perfect price discrimination, discriminating among groups of buyers, or among units of a good can reduce or eliminate deadweight loss.

Which of the Following Markets Will Have the Largest Deadweight