The figure below shows the revenue and cost curves for a profit-maximizing monopolist. Based on the figure, welfare loss due to monopoly is indicated by the area _____.FIGURE 8-1 A)DGE B)DFH C)DFQ₂Q₁ D)EGQ₃Q₁ E)FEG

Question

Quizplus · Accepted Answer

The welfare loss due to monopoly is indicated by the deadweight loss (DWL), which is the reduction in consumer and producer surplus compared to the efficient outcome. In this case, the efficient outcome would be where the price intersects with the demand curve and the quantity produced is where the marginal cost curve intersects with the demand curve. 
The area of deadweight loss is the triangle formed by the points D, F, and H. Therefore, the correct choice is B.

The Figure Below Shows the Revenue and Cost Curves for a Profit-Maximizing