Exhibit 13-1 Refer to Exhibit 13-1.The welfare loss due to monopoly is indicated in the diagram as area: A) DGE. B) DFH. C) DFQ₂Q₁. D) EGQ₃Q₁.

Question

Quizplus · Accepted Answer

The welfare loss due to monopoly is represented by the deadweight loss (DWL) area, which is the triangle between the demand curve (D) and marginal cost curve (MC) where they intersect at the monopoly output level (Qm). This triangle is formed by the vertical distance from point H to point F, and the horizontal distance from point F to point D. Therefore, the area of DFH represents the welfare loss due to monopoly.