A monopoly creates a deadweight loss to society because it earns both short-run and long-run positive economic profits

False, monopolies create deadweight losses when the firm forgoes transactions with the consumers, creating potential gains that do not go the consumer or the producer. Deadweight loss causes the monopoly and consumer surplus to become less than that obtained by consumers in competitive markets, thus causing market inefficiencies. When monopolies experience inefficiencies, they can easily be overthrown by other companies since it becomes less competitive. Deadweight loss is caused by various factors such as negative externalities that might lead to market failure, price ceilings and floors as well as imperfections in the market.