The figure below shows the revenue and cost curves for a profit-maximizing monopolist. Based on the figure, in a monopoly, deadweight loss is denoted by the area _____.FIGURE 8-7
A)b + c
B)c + e
C)a + b + d
D)d + e
E)a + b + c

Question

The figure below shows the revenue and cost curves for a profit-maximizing monopolist. Based on the figure, in a monopoly, deadweight loss is denoted by the area _____.FIGURE 8-7 
A)b + c​ 
B)c + e 
C)a + b + d 
D)d + e 
E)a + b + c

Quizplus · Accepted Answer

Deadweight loss is the loss of economic efficiency that occurs when a good or service is not priced optimally or when quantity supplied does not equal quantity demanded. In a monopoly, deadweight loss is denoted by the area of the triangle between the demand curve, the marginal cost curve, and the monopolist's output quantity. This area is represented by c+e in the given figure. Therefore, the correct choice is B.

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