In: Economics
Imagine a profit-maximizing monopoly operating under the following conditions. The price which maximizes profit is $12. The marginal revenue (MR) curve and marginal cost (MC) curve intersect where the quantity of output is 10 units and marginal cost is $6. The socially efficient quantity of production is 14 units. The demand curve and MC curves are linear. What is the size of the deadweight loss created by this monopolist?
$4
$6
$12
$16