Refer to the accompanying graph to answer the next question. The deadweight loss associated with this profit-maximizing monopoly is represented by areas单项选择题
A
a. C + D.
B
b. A + B.
C
c. E + H.
D
d. I + J.

Question

Refer to the accompanying graph to answer the next question. The deadweight loss associated with this profit-maximizing monopoly is represented by areas

BlackTom AI · Accepted Answer

To tackle this question, first we identify what deadweight loss (DWL) means in the context of a profit-maximizing monopoly.
- A monopoly produces at the quantity where marginal revenue (MR) equals marginal cost (MC), not where price equals marginal cost as in perfect competition. This typically results in a lower quantity and a higher price than the socially efficient outcome, creating a loss of total surplus that is not compensated by any gain elsewhere. The DWL is represented by the area between the demand curve (societal willingness to pay) and the MC curve over the range from the monopoly quantity to the socially efficient quantity.
With that in mind, evaluate each option:
Option a: C + D. These regions would include areas associated with price distortions at or before the monopoly quantity, but DWL in standard monopoly analysis is the surplus loss between demand and MC from monopoly output to the competitive (efficient) output. This pair does not match the typical DWL region in most monopoly diagrams.
Option b: A + B. Area A and B lie above the monopoly output region and are not the standard DWL triangle(s) created by underproduction relative to the competitive outcome. These areas do not capture the welfare loss due to the quantity shortfall.
Option c: E + H. Here, E and H together form the triangular regions between the demand curve and the MC curve over the quantity interval from the monopoly quantity to the socially efficient quantity. This combination aligns with the usual depiction of DWL in monopoly diagrams, representing the net loss in total surplus from underproduction.
Option d: I + J. These areas are typically located below the monopoly quantity, often associated with other surplus measures (like portions of producer or consumer surplus not directly tied to the DWL between demand and MC across the efficient vs. monopoly output). They do not represent the standard DWL interval.
In summary, the deadweight loss in a profit-maximizing monopoly is the surplus lost due to producing less than the socially efficient quantity, captured by the areas where demand exceeds MC over that range. Among the choices, E + H corresponds precisely to that DWL region, whereas the others do not align with the conventional DWL depiction in monopoly graphs.

Refer to the accompanying graph to answer the next question. The deadweight loss associated with this profit-maximizing monopoly is represented by areas单项选择题

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