Question

The deadweight loss caused by a profit-maximizing monopoly amounts to:_________
a. $450.
b. $1,350.
c. $900.
d. $225.

Answer 1

Answer: $225

Explanation:

Deadweight loss is caused by inefficient allocation of the resources or when both the supply and the demand for a product aren't in equilibrium.

The deadweight loss will be calculated as:

= 1/2 base × height

= 1/2 × 15 × 30

= $225