Exhibit 13-6 Refer to Exhibit 13-6.In single price monopoly,deadweight loss is area:
A) b + c
B) c + e
C) a + b + d
D) d + e

Question

Exhibit 13-6  Refer to Exhibit 13-6.In single price monopoly,deadweight loss is area:
A) b + c 
B) c + e 
C) a + b + d 
D) d + e

Quizplus · Accepted Answer

Deadweight loss is the loss of economic efficiency that occurs when the equilibrium for a good or service is not Pareto optimal. In single-price monopoly, deadweight loss is the area of the triangle formed by the points where the demand curve, marginal revenue curve, and marginal cost curve intersect. In Exhibit 13-6, area B represents the deadweight loss. Therefore, the correct answer is B.