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Graph and explain the deadweight loss due to monopoly.

Graph and explain the deadweight loss due to monopoly.

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deadweight loss is shows in the above graph. Deadweight loss occurs when monopolist produce profit maximising quantity and not socially efficient quantity. Profit maximising quantity is where marginal revenue equals marginal cost. Socially efficient quantity is when demand intersects marginal cost curve.

Q max is profit maximising quantity and Q efficient is socially efficient quantity.

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