Purchase Solution

Deadweight loss

Not what you're looking for?

Ask Custom Question

Studies have concluded that the deadweight loss of monopoly power in the US is less than 0.5 percent of GNP. From your knowledge of the determinants of the deadweighlt loss, explain why such a small figure is plausible.

Purchase this Solution

Solution Summary

This posting gives you an in-depth insight into Deadweight loss

Solution Preview

Studies have concluded that the deadweight loss of monopoly power in the US is less than 0.5 percent of GNP. From your knowledge of the determinants of the deadweight loss, explain why such a small figure is plausible.
In a normal monopoly the monopolist sets one price for all customers and produces lower quantity of goods at sells hem at a higher price than what would have been sold in perfect competition. This is a condition in which the prices are kept high artificially. In other words, customers who value the product more than its marginal cost are ...

Purchase this Solution


Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.