Alright. So now let's discuss the idea of consumer and producer surplus in a monopoly as well as the ideas of efficiency, productive and allocative efficiency or the lack thereof. Let's check it out. So what we're going to see is that a monopoly always produces less than the efficient quantity, right? The efficient quantity is something like what we saw in perfect competition where they were reaching efficiency, well here they produce less, okay? So we'll see that on the graph and what happens? We're not producing the efficient quantity, we're producing less than that efficient quantity. Well, when we're not producing the efficient quantity, we're going to have a deadweight loss. Okay? So there's going to be a deadweight loss in the market for a monopoly. Okay? So let's go down here on the graph and let's discuss this producer and consumer surplus under perfect competition first. So we'll see how it is efficient and then we'll move on to a monopoly and see where the deadweight loss
12. Monopoly
Monopoly Efficiency and Deadweight Loss
12. Monopoly
Monopoly Efficiency and Deadweight Loss - Online Tutor, Practice Problems & Exam Prep
Monopolies do not produce the efficient quantity.
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concept
Monopoly Efficiency and Deadweight Loss
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Video transcript
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Problem
ProblemAn unregulated monopoly will sell:
A
30 tickets
B
50 tickets
C
60 tickets
D
100 tickets
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Problem
ProblemIf the monopolist's fixed cost is $25, the monopoly's total costs when maximizing profit is:
A
$35
B
$45
C
$85
D
$145
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Problem
ProblemIf the monopolist's fixed cost is $25, the monopoly's total economic profit when maximizing profit is:
A
$0
B
$20
C
$45
D
The monopoly is incurring a loss
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Problem
ProblemThe deadweight loss created by the monopoly is:
A
$0
B
$22.5
C
$45
D
$90