Deadweight loss occurs because some consumers are willing to pay at least the marginal cost for the good, even if they are not willing to pay the monopolist's price. If monopolies were able to charge these consumers a lower price without lowering prices to consumers willing to pay more, deadweight loss would ______, some consumers would be ______ off, and the monopolist would be ______ off.
A) increase; worse; better
B) increase; better; worse
C) decrease; worse; better
D) decrease; better; better

Question

Quizplus · Accepted Answer

Deadweight loss would decrease because the monopolist could capture more consumer surplus by charging different prices. Some consumers would be better off because they pay a price closer to their willingness to pay, and the monopolist would be better off by capturing more profit.

Deadweight Loss Occurs Because Some Consumers Are Willing to Pay