Question

The profit that a monopolist earns represents a loss to society that is measured through deadweight loss

O true
O false

Answer 1

False. The profit earned by a monopolist does not represent a loss to society, measured through deadweight loss.

Step-by-step explanation:

False. Instead, deadweight loss occurs when an economy produces at an inefficient quantity, resulting in a reduction in the total surplus of society.

Deadweight loss is the loss in social surplus that happens when the economy operates in an inefficient manner. It can occur in various situations, such as when monopolies restrict output to create scarcity and drive up prices.

Therefore, the profit earned by a monopolist does not directly represent a loss to society as measured through deadweight loss.