DragIT - Welfare loss under monopoly
Deadweight welfare loss depends on the degree of monopoly power, which in turn depends on the price elasticity of demand for the monopoly's product.
To see how the deadweight welfare loss changes as the price elasticity of demand changes, drag the handle at the end of the AR curve (i.e. the demand curve) in the diagram below. The deadweight welfare loss is represented by the shaded area. As demand becomes more elastic, so the deadweight welfare loss decreases.
