curve, and the cost curves for a profit-maximizing monopolist with constant costs.

What area represents deadweight loss ("DWL") if this firm chooses a single price and what is the deadweight loss if this firm can perfectly price discriminate?

Choose 1 answer:
(A) $D W L=P_{a} f P_{b}$ for a single price monopolist; $D W L=k l m$ for a perfect price discriminating monopolist
(B) $D W L=k l m$ for a single price monopolist; $D W L=f j k$ for a perfect price discriminating monopolist.
(C) $D W L=k i h$ for a single price monopolist; $D W L=f j k$ for a perfect price discriminating monopolist.
(D) $D W L=f k j$ for a single price monopolist; $D W L=0$ for perfect price discriminating monopolist.
(E) $D W L=0$ for a single price monopolist; $D W L=0$ for a perfect price discriminating monopolist

Question

curve, and the cost curves for a profit-maximizing monopolist with constant costs.

What area represents deadweight loss ("DWL") if this firm chooses a single price and what is the deadweight loss if this firm can perfectly price discriminate?

Choose 1 answer:
(A) $D W L=P_{a} f P_{b}$ for a single price monopolist; $D W L=k l m$ for a perfect price discriminating monopolist
(B) $D W L=k l m$ for a single price monopolist; $D W L=f j k$ for a perfect price discriminating monopolist.
(C) $D W L=k i h$ for a single price monopolist; $D W L=f j k$ for a perfect price discriminating monopolist.
(D) $D W L=f k j$ for a single price monopolist; $D W L=0$ for perfect price discriminating monopolist.
(E) $D W L=0$ for a single price monopolist; $D W L=0$ for a perfect price discriminating monopolist

Accepted Answer

∻Solution∻ ‖ a ⋮ Deadweight Loss for Single-Price Monopolist: Deadweight loss occurs when the quantity produced is less than the socially optimal quantity, where marginal cost (MC) equals marginal benefit (demand curve). For a single-price monopolist, this is the area between the demand curve and the MC curve from the monopolist's quantity to the socially optimal quantity. ‖ ‖ b ⋮ Deadweight Loss for Perfect Price Discriminating Monopolist: A perfect price discriminating monopolist charges each consumer the maximum they are willing to pay, thus selling up to the point where price equals MC. This eliminates deadweight loss because the quantity produced is socially optimal. ‖ ∻Answer∻ ⚹ (D) $DWL=fkj$ for a single price monopolist; $DWL=0$ for perfect price discriminating monopolist. ⚹ ∻Key Concept∻ ⚹ Deadweight Loss in Monopoly ⚹ ∻Explanation∻ ⚹ Deadweight loss in a single-price monopoly is represented by the area between the demand curve and the MC curve from the monopolist's quantity to the socially optimal quantity. In perfect price discrimination, the monopolist captures all consumer surplus, and there is no deadweight loss as the quantity produced is socially optimal. ⚹◊What is the formula for deadweight loss in a standard economic model of a monopoly with downward-sloping demand and marginal revenue curves?⍭ Generate me a similar question◊

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