The figure below shows the market equilibrium (point B)at the intersection of demand and supply curves under perfect competition. Figure 24.5 D: Market demand curve
S: Market supply curve
Assume that in Figure 24.5, the market is originally perfectly competitive but then becomes a monopoly.Compared with perfect competition, a monopoly would have:

Question

The figure below shows the market equilibrium (point B)at the intersection of demand and supply curves under perfect competition. Figure 24.5  D: Market demand curve
S: Market supply curve
Assume that in Figure 24.5, the market is originally perfectly competitive but then becomes a monopoly.Compared with perfect competition, a monopoly would have:

Quizplus · Accepted Answer

A monopoly would have a higher price than the market equilibrium price under perfect competition (PC). This is because the monopoly restricts output to sell at a higher price and maximize profits. As a result, the quantity traded would be lower than under perfect competition, leading to a deadweight loss. Additionally, consumer surplus would decrease, while producer surplus would increase for the monopoly. Therefore, the best choice is D.

The Figure Below Shows the Market Equilibrium (Point B)at the Intersection