The figure at right shows the demand and marginal cost curves for a monopoly. The deadweight loss of this monopoly equals
A. C
B. c+f.
C. h
D. c+d+e+f.
Answer: B. c+f.
The deadweight loss is the area which decreases the surplus from social efficient.
Here the Deadweight loss is c+f
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Refer to the graph shown.
Assuming each carnival game costs $1 and each Ferris wheel ride costs $2, a consumer with $10 to spend will optimally choose to consume at point:
A. A. B. B. C. C. D. D.
It is not optimal to have equal incomes.
Answer the following statement true (T) or false (F)
If demand is perfectly elastic,
A. The demand curve is vertical. B. The demand curve is very steep. C. The demand curve has a zero slope. D. The demand curve is horizontal.
According to the above figure, the profit-maximizing output for this monopolist is found directly below the letter
A. P. B. N. C. M. D. R.