The deadweight loss from monopoly problem:

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The deadweight loss from monopoly stems from the monopoly-induced decline in mutually beneficial trade activity. Monopolies lead to reduced output and higher prices compared to the competitive market, which causes a reduction in consumer surplus and restricts competition, which leads to the underutilization of resources. As a result, the society loses the surplus generated by trades not made due to the monopoly. The deadweight loss from monopoly stems from the monopoly-induced decline in mutually beneficial trade activity. Monopoly power allows the firm to restrict output and charge higher prices than it would under competitive conditions, reducing the quantity of goods exchanged in the market. This reduction in trade activity results in lost gains from trade and deadweight loss, which represents a net loss to society. The transfer of surplus from consumers to producers occurs, but it is not what causes the deadweight loss. Similarly, the fact that the marginal cost of production is greater than the marginal social benefit derived is another consequence of monopoly power but not the root cause of deadweight loss. Finally, the presence of positive monopoly profits does not necessarily imply deadweight loss. Rather, it is the reduction in trade activity caused by monopoly power that results in deadweight loss.

The Deadweight Loss from Monopoly Problem