My 60 second explanation of how to identify the consumer and producer surplus on the monopoly graph.

Where is deadweight loss on a monopoly graph. A monopoly makes a profit equal to total revenue minus total cost. Deadweight loss can also be caused by market failures and externalities. Deadweight loss also known as excess burden is a measure of lost economic efficiency when the socially optimal quantity of a good or a service is not produced.

On the consumer of labor side: Notice that monopolies charge a higher price and produce a lower output. The deadweight loss occurs because the tax deters these kinds of beneficial trades in the market.

Deadweight loss also known as excess burden is a measure of lost economic efficiency when the socially optimal quantity of a good or a service is not produced. Blue area = deadweight welfare loss (combined loss of producer and consumer surplus) compared to a competitive market; In the graph, the deadweight loss can be seen as the shaded area between the supply and demand curves.

Consumer surplus is defined by the area below the demand curve, above the. There is less of a capacity for producers to expand their operations. The deadweight loss is drawn from both the consumer and producer surpluses.

When the total output is less than socially optimal, there is a deadweight loss, which is indicated by the red area in figure. While the demand curve shows the value. On a graph, the producer surplus is the area below the market price and above the supply curve.