Which of the following is likely to occur if a monopoly suddenly loses its ability to deny potential competitors entry into the market?
A)The market price of the product will fall.
B)The total market quantity of output produced will fall.
C)Profits for the market will increase.
D)The industry demand curve for the product will shift.

Question

Quizplus · Accepted Answer

If a monopoly suddenly loses its ability to deny potential competitors entry into the market, the market price of the product will fall. This is because competition will increase, and the monopoly will no longer be able to charge high prices without losing customers to their competitors. The total market quantity of output produced may increase or decrease depending on the specific circumstances, but it is not the most likely outcome. Profits for the market are not likely to increase, as increased competition typically leads to lower profit margins. The industry demand curve for the product may shift, but this again depends on the specific circumstances.

Which of the Following Is Likely to Occur If a Monopoly