The following figure shows the marginal revenue [MR],demand,and average cost [AC] curves for a profit-maximizing monopolist.
Figure 11-3
-Refer to Figure 11-3.The loss in welfare in the market due to the monopoly firm is _____.

Question

The following figure shows the marginal revenue [MR],demand,and average cost [AC] curves for a profit-maximizing monopolist.
Figure 11-3 
-Refer to Figure 11-3.The loss in welfare in the market due to the monopoly firm is _____.

Quizplus · Accepted Answer

The loss in welfare due to monopoly can be measured by the deadweight loss, which is the area of the triangle FGH. This represents the welfare that is lost because the monopolist produces less than the socially efficient output level. Therefore, choice B is the correct answer. Choices A, C, and D are not relevant to the question.

The Following Figure Shows the Marginal Revenue [MR],demand,and Average Cost