13. Consider the same industry shown in the previous question. If this industry is organized as a monopoly, the deadweight loss due to monopolization is $25 million.

   Remember that deadweight loss, or excess burden, is surplus that is lost due to reduced sales and is not captured in profits or any other way. If this industry is a profit-maximizing monopoly it will produce 7 million units of output and sell them at $17 per unit. The lost surplus due to this increase in price and reduction in output is shown as the orange triangle to the right. The area of this triangle is 1/2 x 5 million x $10 = $25 million.

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