Figure 15-16

-Refer to Figure 15-16.If the monopoly firm is not allowed to price discriminate,then the deadweight loss amounts to

Question

Figure 15-16
 
-Refer to Figure 15-16.If the monopoly firm is not allowed to price discriminate,then the deadweight loss amounts to

Quizplus · Accepted Answer

The deadweight loss can be calculated as the area of the triangle formed by the demand curve, marginal revenue curve, and the marginal cost curve. In this case, without price discrimination, the profit-maximizing price and quantity are $2,500 and 500 units respectively. The deadweight loss can be calculated as:
(1/2) x (4,000 - 2,500) x (500 - 250) = $1,562.50. So, the correct option is B.

Figure 15-16 -Refer to Figure 15-16.If the Monopoly Firm Is Not Allowed