Deadweight loss from monopoly is
A) the net decrease in the market surplus.
B) the producer surplus loss only.
C) the process of using public policy to reduce losses.
D) the decrease in productivity.

Question

Quizplus · Accepted Answer

Deadweight loss from monopoly refers to the loss of economic efficiency that occurs when a monopolistic market structure restricts the output of a product/good. It results in a net decrease in the market surplus, which is the sum of consumer surplus and producer surplus. So, option A is the correct answer. B, C, and D are incorrect because deadweight loss is not limited to just the producer surplus loss, the use of public policy to reduce losses, or the decrease in productivity.

Deadweight Loss from Monopoly Is