Use the following to answer question:
Figure: Demand,Revenue,and Cost Curves
-(Figure: Demand,Revenue,and Cost Curves)Use Figure: Demand,Revenue,and Cost Curves.Figglenuts-R-Us is a monopolist in the figglenut market.If the government wanted to regulate Figglenuts-R-Us such that the entire deadweight loss would be eliminated in the short run,it would impose a price ceiling of:
A)$40.
B)$46.
C)$50.
D)$65.

Question

Use the following to answer question:
Figure: Demand,Revenue,and Cost Curves 
-(Figure: Demand,Revenue,and Cost Curves)Use Figure: Demand,Revenue,and Cost Curves.Figglenuts-R-Us is a monopolist in the figglenut market.If the government wanted to regulate Figglenuts-R-Us such that the entire deadweight loss would be eliminated in the short run,it would impose a price ceiling of:
A)$40. 
B)$46. 
C)$50. 
D)$65.

Quizplus · Accepted Answer

The deadweight loss is the area of the triangle below the demand curve and above the marginal cost curve. To eliminate the deadweight loss, the government would need to impose a price ceiling at the point where the demand curve intersects the marginal cost curve. This point is at a price of $40.

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