which area in exhibit 9-17 represents deadweight loss under monopoly with perfect price discrimination? area a

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02-09-2022
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which area in exhibit 9-17 represents deadweight loss under monopoly with perfect price discrimination? area a

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tutorconsortium344 tutorconsortium344 · Answer 1 · 2022-09-06T11:53:38-04:00

There is no loss of deadweight.

WHAT IS DEADWEIGHT LOSS?

The gap between the production and consumption of any given good or service, including taxes, is referred to as deadweight loss in economics. Deadweight loss is most frequently detected when the quantity generated compared to the quantity consumed deviates from the ideal surplus concentration. This discrepancy in the amounts represents the quantity that is being wasted or not being consumed, causing a loss. As a result, both producers and consumers are to blame for this "deadweight loss" since neither group benefits from the excess of total production.

Deadweight loss brought on by a rigid price cap. Despite the fact that the consumer surplus may or may not rise, the production surplus always declines.

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