If an insurmountable barrier to entry is lifted and a market that was once dominated by a monopolist is now perfectly competitive, the total surplus will ______.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, barriers to entry are minimal, making it easier for new firms to enter and compete with existing firms. This increased competition will lead to lower prices for consumers and increased output, leading to an increase in total surplus (consumer surplus + producer surplus). Therefore, the correct answer is (A) increase.

If an Insurmountable Barrier to Entry Is Lifted and a Market