Figure: Deadweight Loss Refer to the figure. Deadweight loss caused by monopoly pricing is represented by the area:

Question

Figure: Deadweight Loss  Refer to the figure. Deadweight loss caused by monopoly pricing is represented by the area:

Quizplus · Accepted Answer

Deadweight loss is the loss in consumer and producer surplus due to a market inefficiency, in this case, monopoly pricing. The area of deadweight loss is the triangle formed by the intersection of the demand and marginal cost curves (point E), the monopoly price (point C), and the quantity produced by the monopoly (point F). This area is represented by acdf in the figure, so the correct answer is B.

Figure: Deadweight Loss Refer to the Figure