-Refer to the graph above.Compared to long-run equilibrium under perfect competition,a monopoly in this industry causes price to
A) rise from $4 to $6 per unit and output to fall from 200 to 100 units.
B) fall from $6 to $4 per unit and output to rise from 100 to 200 units.
C) rise from $4 to $5 per unit and output to fall from 200 to 150 units.
D) fall from $5 to $4 per unit and output to rise from 150 to 200 units.
E) fall from $7 to $4 per unit and output to rise from 150 to 300 units.

Question

-Refer to the graph above.Compared to long-run equilibrium under perfect competition,a monopoly in this industry causes price to
A) rise from $4 to $6 per unit and output to fall from 200 to 100 units. 
B) fall from $6 to $4 per unit and output to rise from 100 to 200 units. 
C) rise from $4 to $5 per unit and output to fall from 200 to 150 units. 
D) fall from $5 to $4 per unit and output to rise from 150 to 200 units. 
E) fall from $7 to $4 per unit and output to rise from 150 to 300 units.

Quizplus · Accepted Answer

In a monopoly, the firm restricts output to increase prices above the competitive level. Thus, price rises from $4 to $6, and output falls from 200 to 100 units.

-Refer to the Graph Above