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