Refer to the graph shown. Suppose the industry is currently perfectly competitive but then is taken over by a monopolist. Assuming that the monopolist maximizes profit:
A) the price of computers will increase from $400 to $600 but there will be no change in quantity demanded.
B) the price of computers will increase from $400 to $600 and the quantity demanded will fall from 400 to 200.
C) the price of computers will decrease from $600 to $400 and the quantity demanded will rise from 200 to 400.
D) there will be no effect on the price of computers.

Question

Refer to the graph shown. Suppose the industry is currently perfectly competitive but then is taken over by a monopolist. Assuming that the monopolist maximizes profit: 
A) the price of computers will increase from $400 to $600 but there will be no change in quantity demanded. 
B) the price of computers will increase from $400 to $600 and the quantity demanded will fall from 400 to 200. 
C) the price of computers will decrease from $600 to $400 and the quantity demanded will rise from 200 to 400. 
D) there will be no effect on the price of computers.

Quizplus · Accepted Answer

The Answer of Refer to the graph shown. Suppose the industry is currently perfectly competitive but then is taken over by a monopolist. Assuming that the monopolist maximizes profit: 
A) the price of computers will increase from $400 to $600 but there will be no change in quantity demanded. 
B) the price of computers will increase from $400 to $600 and the quantity demanded will fall from 400 to 200. 
C) the price of computers will decrease from $600 to $400 and the quantity demanded will rise from 200 to 400. 
D) there will be no effect on the price of computers.

Refer to the Graph Shown