Total economic loss due to monopoly pricing is equal to the loss to producer surplus minus the loss in consumer surplus.

Question

Quizplus · Accepted Answer

Total economic loss due to monopoly pricing, also known as deadweight loss, is the loss in consumer and producer surplus that is not offset by an increase in monopoly profits. It is not simply the loss to producer surplus minus the loss in consumer surplus; rather, it is the overall reduction in efficiency and total surplus in the market due to the monopolist's price being higher and output lower than in a competitive market.

Total Economic Loss Due to Monopoly Pricing Is Equal to the Loss