Figure 15-5
The figure below depicts the demand, marginal revenue and marginal cost curves of a profit-maximizing monopolist.

-Refer to Figure 15-5.Which of the following areas represents the deadweight loss due to monopoly pricing?
A)Triangle bde
B)Triangle bge
C)Rectangle acdb
D)Rectangle cfgd

Question

Figure 15-5
The figure below depicts the demand, marginal revenue and marginal cost curves of a profit-maximizing monopolist.
 
-Refer to Figure 15-5.Which of the following areas represents the deadweight loss due to monopoly pricing?
A)Triangle bde 
B)Triangle bge 
C)Rectangle acdb 
D)Rectangle cfgd

Quizplus · Accepted Answer

The deadweight loss due to monopoly pricing is represented by the area between the demand curve and the marginal cost curve, from the quantity where the marginal revenue curve intersects with the marginal cost curve, to the quantity where the demand curve intersects with the price set by the monopolist. In this case, that area is Triangle bge.

Figure 15-5 The Figure Below Depicts the Demand, Marginal Revenue and Marginal