In a perfectly competitive market, the consumer surplus remains with the consumer and producer surplus with the producer.
In the case of monopolies, part of the consumer surplus is taken up by the firm. That part is a loss to the consumer.
In addition, part of the producer surplus is lost to the firm.
Dead weight loss due to monopoly is the sum of these losses.
These are abstract concepts and cannot be measured.
Monopolists engages in price discimination, if he sells same product to different consumers at different prices.
Resale is not possible.
Monopolist is able to identify each buyer on the basis of the maximum price they are willing to pay. The consequence of this is that the entire consumer surplus is taken up by the monopoly.
Examples include lawyers, tax consultants etc.
Two segregated markets resulting in resale being not possible.
Example: electricity rates in rural and urban areas. Rates of advertisements at different times of day. Different entry costs for different nationalities.
Here,
and,
Then,