HOW TO FIND DEADWEIGHT LOSS IN MONOPOLY

To find deadweight loss in a monopoly , we follow the following steps

1- Draw the two axes. On the x-axis take price and on the y-axis take quantity.

2- Draw the marginal cost, marginal revenue and the demand curves.

3- Find equilibrium point and also find total welfare i.e. consumer plus producer surplus.

4- Now, on the same figure find total welfare in case if it was not monopoly but competitive market.

5- The difference between the competitive market total welfare and monopoly total welfare is positive and it is deadweight loss.

6- You have your deadweight loss in monopoly:)