To find the deadweight loss from monopoly, we first need to find the quantity produced by the monopoly and the quantity that would be produced in a competitive market.

1. Find the monopoly quantity (Qm):
The monopoly maximizes profit where marginal cost (MC) equals marginal revenue (MR). The demand curve is p = 100 - 2Q, so the marginal revenue curve, which is twice as steep, is MR = 100 - 4Q. Setting this equal to MC and solving for Q gives us:

100 - 4Q = 16
4Q = 84
Qm = 21

2. Find the competitive quantity (Qc):
In a competitive market, price equals marginal cost. Setting the demand curve equal to MC and solving for Q gives us:

100 - 2Q = 16
2Q = 84
Qc = 42

3. Find the deadweight loss:
The deadweight loss is the area of the triangle formed by the demand curve, the MC curve, and the line from Qm to Qc. The base of the triangle is Qc - Qm = 42 - 21 = 21. The height of the triangle is the difference in price between the monopoly and competitive quantities, which is (100 - 2*21) - (100 - 2*42) = 42 - 16 = 26. The area of a triangle is 1/2 * base * height, so the deadweight loss is:

DWL = 0.5 * 21 * 26 = 273

So, the deadweight loss from monopoly is 273.

Question

To find the deadweight loss from monopoly, we first need to find the quantity produced by the monopoly and the quantity that would be produced in a competitive market.

1. Find the monopoly quantity (Qm): 
   The monopoly maximizes profit where marginal cost (MC) equals marginal revenue (MR). The demand curve is p = 100 - 2Q, so the marginal revenue curve, which is twice as steep, is MR = 100 - 4Q. Setting this equal to MC and solving for Q gives us:

100 - 4Q = 16
   4Q = 84
   Qm = 21

2. Find the competitive quantity (Qc): 
   In a competitive market, price equals marginal cost. Setting the demand curve equal to MC and solving for Q gives us:

100 - 2Q = 16
   2Q = 84
   Qc = 42

3. Find the deadweight loss: 
   The deadweight loss is the area of the triangle formed by the demand curve, the MC curve, and the line from Qm to Qc. The base of the triangle is Qc - Qm = 42 - 21 = 21. The height of the triangle is the difference in price between the monopoly and competitive quantities, which is (100 - 2*21) - (100 - 2*42) = 42 - 16 = 26. The area of a triangle is 1/2 * base * height, so the deadweight loss is:

DWL = 0.5 * 21 * 26 = 273

So, the deadweight loss from monopoly is 273.

Knowee AI · Accepted Answer

To find the deadweight loss from monopoly, we first need to find the quantity produced by the monopoly and the quantity that would be produced in a competitive market.

1. Find the monopoly quantity (Qm): 
   The monopoly maximizes profit where marginal cost (MC) equals marginal revenue (MR). The demand curve is p = 100 - 2Q, so the marginal revenue curve, which is twice as steep, is MR = 100 - 4Q. Setting this equal to MC and solving for Q gives us:

100 - 4Q = 16
   4Q = 84
   Qm = 21

2. Find the competitive quantity (Qc): 
   In a competitive market, price equals marginal cost. Setting the demand curve equal to MC and solving for Q gives us:

100 - 2Q = 16
   2Q = 84
   Qc = 42

3. Find the deadweight loss: 
   The deadweight loss is the area of the triangle formed by the demand curve, the MC curve, and the line from Qm to Qc. The base of the triangle is Qc - Qm = 42 - 21 = 21. The height of the triangle is the difference in price between the monopoly and competitive quantities, which is (100 - 2*21) - (100 - 2*42) = 42 - 16 = 26. The area of a triangle is 1/2 * base * height, so the deadweight loss is:

DWL = 0.5 * 21 * 26 = 273

So, the deadweight loss from monopoly is 273.

If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then the deadweight loss from monopoly equals

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