Purchase Solution

Deadweight loss of a monopoly

Not what you're looking for?

Ask Custom Question

Explain why the deadweight loss of a monopoly may vary from standard estimates.

Purchase this Solution
Solution Summary

Detailed response to the query with references. In the below section, the deadweight losses in monopoly is explained. These are the losses that occur due to inefficiencies in the economy. There are several reasons behind the deviation from the standard estimates of these losses. The parameters responsible for these variations are also discussed.

Solution Preview

In the below section, the deadweight losses in monopoly is explained. These are the losses that occur due to inefficiencies in the economy. There are several reasons behind the deviation from the standard estimates of these losses. The parameters responsible for these variations are also discussed.

Deadweight loss represents the net loss to the society due to economic inefficiency. Resource misallocation leads to economic inefficiency. It is the loss on the part of consumers but nobody gains from these losses. In a monopoly, there is only one seller that owns a key resource or has exclusive rights to produce or have any technical advantage. The output is reduced ...

Solution provided by:
Ashish Sharma, MBA (IP)
Education
  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
Recent Feedback
  • "Thank You so much! "
  • "Always provide great help, I highly recommend Mr. Sharma over others, thanks again. "
  • "great job. I will need another help from you. "
  • "first class!"
  • "Thank you for your great notes. Will you be willing to help me with one more assignment? "
Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

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

Economic Issues and Concepts

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

Basics of Economics

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

Economics, Basic Concepts, Demand-Supply-Equilibrium

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

View More Free Quizzes
Related BrainMass Solutions

  • deadweight loss of monopoly

    289867 Deadweight loss of monopoly Explain why a certain triangular area is a measure of the deadweight loss of monopoly. What information do you require in order to calculate the size of this triangle?

  • Deadweight loss

    289868 Deadweight loss ? 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.

  • Social Welfare Long Term Outcomes

    The area CEF is a deadweight loss. It is a total loss to society due the monopoly act. Whereas for the producer surplus, it is loss to consumers at large to the benefit of a monopolist.

  • Consumer surplus, producer surplus and deadweight loss

    This post shows how the consumer surplus, producer surplus and deadweight loss are compared for a monopoly and perfect competition.

  • Deadweight loss of monopoly for plastic hangers

    and deadweight loss of monopoly.

  • Profit maximizing output level

    c.Calculate the dead weight loss of this monopoly. The deadweight loss is denoted by area of triangle ABC.

  • Dead weight loss of this monopoly

    Calculate the deadweight loss of this monopoly? The deadweight loss is the area covered by the triangle ABC.

  • deadweight loss

    Thus, monopolist is producing at a level lower than the pareto-optimal point and hence deadweight loss. 2) Monopoly The QXR Company has bought exclusive rights to sell hot dogs in a local sports arena.

  • Monopolistic questions

    e. the deadweight loss is 16. The deadweight loss is the triangle with vertices (2,10) (2,18) and (6,14) (the graphy is not aligned properly, so i just took the closest number on the axis). f.

View More Related Solutions