Use the following table to answer the question : Table 15-2: shows the marginal revenue curve [MR],the demand curve,and the marginal cost curve [MC] for a monopolist with constant costs.

-Suppose that the market in Figure 15-2 were served by an oligopoly such that the equilibrium output was 450.Then the welfare loss would be _____ as compared to the welfare loss of _____ under monopoly.
A)$37.50;$150
B)$75;$150
C)$37.50;$450
D)$75;$450

Question

Use the following table to answer the question : Table 15-2: shows the marginal revenue curve [MR],the demand curve,and the marginal cost curve [MC] for a monopolist with constant costs.

-Suppose that the market in Figure 15-2 were served by an oligopoly such that the equilibrium output was 450.Then the welfare loss would be _____ as compared to the welfare loss of _____ under monopoly.
A)$37.50;$150 
B)$75;$150 
C)$37.50;$450 
D)$75;$450

Quizplus · Accepted Answer

The welfare loss under oligopoly is smaller than under monopoly because oligopolies tend to produce more and charge lower prices than monopolies, leading to a smaller deadweight loss. The specific values ($37.50 for oligopoly and $150 for monopoly) are calculated based on the differences in consumer surplus, producer surplus, and deadweight loss between the two market structures.

Use the Following Table to Answer the Question : Table