Figure 11-21
-The welfare loss associated with the unregulated natural monopoly in Figure 11-21 is shown by the area

Question

Figure 11-21 
-The welfare loss associated with the unregulated natural monopoly in Figure 11-21 is shown by the area

Quizplus · Accepted Answer

The welfare loss in an unregulated natural monopoly is typically represented by the deadweight loss, which is the area between the demand and marginal cost curves over the range of output where the monopoly restricts production. In this context, area "cef" represents this deadweight loss.

Figure 11-21 -The Welfare Loss Associated with the Unregulated Natural Monopoly in Natural