-Refer to the table above.The deadweight loss due to monopoly in the market stems from the fact that
A) this monopolist will earn a large profit.
B) the value of unit four and unit five exceed or equal the cost of producing them.
C) the cost of producing units four and five exceed their value.
D) the monopolist's price is "too low."
E) the monopolist's output is "too large."

Question

-Refer to the table above.The deadweight loss due to monopoly in the market stems from the fact that
A) this monopolist will earn a large profit. 
B) the value of unit four and unit five exceed or equal the cost of producing them. 
C) the cost of producing units four and five exceed their value. 
D) the monopolist's price is "too low." 
E) the monopolist's output is "too large."

Quizplus · Accepted Answer

Deadweight loss in a monopoly occurs because the monopolist produces less than the socially optimal quantity, where the value to consumers (demand) exceeds the cost of production (supply) for additional units.

-Refer to the Table Above