This graph shows the cost and revenue curves faced by a monopoly. According to the graph,if the perfectly competitive outcome and monopoly outcome are compared,we can see that the:

Question

This graph shows the cost and revenue curves faced by a monopoly.  According to the graph,if the perfectly competitive outcome and monopoly outcome are compared,we can see that the:

Quizplus · Accepted Answer

The graph shows that the monopoly outcome results in a higher price (P3) and lower quantity (Q2) compared to the perfectly competitive outcome (P1 and Q1). This leads to a deadweight loss, which is the difference between the consumer surplus and producer surplus in the monopoly outcome and the perfectly competitive outcome. Therefore, choice A is the correct option. The other options are incorrect because the graph does not provide information to support them.

This Graph Shows the Cost and Revenue Curves Faced by a Monopoly