-The figure above shows the market for coffee. If one firm owns all the coffee outlets and sells 10 million pounds of coffee a month
A) the market is efficient because the marginal social benefit from coffee exceeds its marginal social cost.
B) the market is efficient because the total social benefit from coffee exceed the total social cost.
C) there is a deadweight loss because the marginal social benefit from the last pound of coffee exceeds its marginal social cost.
D) there is a deadweight loss because the marginal social cost of the last pound of coffee exceeds its marginal social benefit.

Question

-The figure above shows the market for coffee. If one firm owns all the coffee outlets and sells 10 million pounds of coffee a month
A) the market is efficient because the marginal social benefit from coffee exceeds its marginal social cost. 
B) the market is efficient because the total social benefit from coffee exceed the total social cost. 
C) there is a deadweight loss because the marginal social benefit from the last pound of coffee exceeds its marginal social cost. 
D) there is a deadweight loss because the marginal social cost of the last pound of coffee exceeds its marginal social benefit.

Quizplus · Accepted Answer

There is a deadweight loss because the monopolist restricts output to maximize profit, leading to a situation where the marginal social benefit of the last pound of coffee exceeds its marginal social cost, indicating inefficiency.

-The Figure Above Shows the Market for Coffee