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illustrated the dead weight loss under monopoly.does it exist in case of perfect competition as well.


Arsh Bawa 19th Apr, 2020
Answer (1)
mjaisinghani62 19th Apr, 2020

Hello aspirant

Deadweight Loss , the monopolists produces a quantity such  that marginal revenue equals marginal cost. The price is determined by demand curve at this quantity. A monopoly makes a profit equal to the total revenue minus total cost ..

A monopolistically competitive market is inefficient. Since a monopolistic competitive firm has powers over the market that are similar to a monopoly . It's profit maximising level of production will result in a net loss of consumer and producer  surplus, creating deadweight Loss.

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