The best estimate of the dead-weight welfare loss due to monopoly is biased downward because it does not take into account

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Quizplus · Accepted Answer

All of the above factors (reductions in product quality, higher costs of production, and decreases in product variety) are important to consider when estimating the dead-weight welfare loss due to monopoly. Failing to take these factors into account will result in a biased downward estimate of the actual welfare loss.

The Best Estimate of the Dead-Weight Welfare Loss Due to Monopoly