The reason a monopoly imposes a deadweight loss on society i

The reason a monopoly imposes a deadweight loss on society is that:

1.social losses weigh heavily on public authorities.

2.there is a gain in profitability to firms that would have been in the industry had there been no monopoly.

3.consumers are denied output for which they are willing to pay more than the cost of producing it.

4.the government is concerned about the negative impact of a monopoly on consumers.

Solution

3. consumers are denied output for which they are willing to pay more than the cost of producing it.

Deadweight loss in society occurs when sale of output is less than efficient level. Consumers buy less product than what they are willing to purchase, this resulted into deadweight loss.