question archive The difference in total surplus between the socially efficient level of production and the monopolist's level of production is: a
The difference in total surplus between the socially efficient level of production and the monopolist's level of production is: a
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The difference in total surplus between the socially efficient level of production and the monopolist's level of production is:
a. offset by regulatory revenues.
b. called a deadweight loss.
c. equal to the monopolist's profit.
d. Both b and c are correct.
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The correct option is:
b. called a deadweight loss.
A deadweight loss is defined as the loss of the economic surplus accruing to the producer, consumer, or both when the economy or the market does not operate at the socially optimal level of production. The production in the monopoly market is lower than the competitively efficient markets and this often creates deadweight losses in the market.
