-If the firm in the figure above is unregulated, the deadweight loss will be
A) zero.
B) $100.
C) $200.
D) $400.

Question

-If the firm in the figure above is unregulated, the deadweight loss will be
A) zero. 
B) $100. 
C) $200. 
D) $400.

Quizplus · Accepted Answer

In an unregulated monopoly, the firm maximizes profit where marginal cost equals marginal revenue, not where price equals marginal cost. This results in a deadweight loss, which is the loss of economic efficiency when the equilibrium outcome is not achieved. The deadweight loss is typically calculated as the area of the triangle formed between the demand curve and the marginal cost curve, up to the quantity produced by the monopoly. In this case, it is given as $200.

-If the Firm in the Figure Above Is Unregulated, the Deadweight