Explore BrainMass

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?

© BrainMass Inc. brainmass.com June 23, 2018, 12:47 am ad1c9bdddf


Solution Preview

Dead weight loss occurs as the monopoly producer produces at a lower quantity and charges a higher price from the consumers. Thus, monopoly is producing at a level lower than the pareto-optimal point and hence deadweight loss. ...

Solution Summary

A deadweight loss of monopoly is depicted.