(Transcript of audio with descriptions. Transcript includes narrator headings and description headings of the visual content)
(Description)
The graph from the slide 1 is shown.
The following text is written above the graph:
Which area reflects the deadweight loss to society from single-price monopoly?
(Speaker)
Under the perfectly competitive industry, consumer surplus was equal to area, A, R, E.
(Description)
The corresponding area on the graph, A, R, E, is briefly highlighted.
(Speaker)
If the same industry is a single price monopoly then a portion of the consumer surplus is now profit for the monopoly area, B, E, F, H.
(Description)
The corresponding area on the graph, B, E, F, H, is briefly highlighted.
(Speaker)
Consumer surplus shrinks to area, A, F, B, and there is a portion consumer surplus that vanishes.
(Description)
Area, A, R, E, is briefly highlighted.
(Speaker)
This problem asks you to find the deadweight loss under a single-price monopoly. Deadweight loss occurs as the single price monopoly raises prices and reduces output. Some consumers will no longer purchase the good. In other words, it is the portion of consumer surplus from the competitive industry we have not accounted for, which is area, F, R, H.
(Description)
The corresponding area on the graph, F, R, H, is briefly highlighted. It is labeled as Deadweight loss for the single-price monopoly is area, F, R, H.
(Speaker)
Notice, that these consumers are not willing to purchase the item at the higher price.