Figure 10-10

-Refer to Figure 10-10.The deadweight loss due to a monopoly is represented by the area
A) FHE.
B) FGE.
C) GEH.
D) FQ₁Q₂E.

Question

Figure 10-10
 
-Refer to Figure 10-10.The deadweight loss due to a monopoly is represented by the area
A) FHE. 
B) FGE. 
C) GEH. 
D) FQ₁Q₂E.

Quizplus · Accepted Answer

The deadweight loss due to a monopoly is represented by the area FHE. This is because the monopoly restricts output to Q₁, which is less than the competitive output of Q₂, resulting in a loss of consumer surplus (area FGE) and producer surplus (area GEH).

Figure 10-10 -Refer to Figure 10-10.The Deadweight Loss Due to a Monopoly