The following figure shows revenue and cost curves of a monopolist. Figure 24.8 AR: Average revenue curve
MR: Marginal revenue curve
MC: Marginal cost curve
According to Figure 24.7, the deadweight loss of monopoly is:

Question

The following figure shows revenue and cost curves of a monopolist. Figure 24.8  AR: Average revenue curve
MR: Marginal revenue curve
MC: Marginal cost curve
According to Figure 24.7, the deadweight loss of monopoly is:

Quizplus · Accepted Answer

Deadweight loss is the loss of consumer and producer surplus that occurs when the market is not in equilibrium. In a monopoly market, the price charged is higher than the marginal cost, which results in a reduction in consumer surplus and a reduction in the number of units sold. The deadweight loss is the area of the triangle ACD, which represents the loss of consumer and producer surplus. Therefore, C is the best choice.

The Following Figure Shows Revenue and Cost Curves of a Monopolist