Antitrust action restructures a previously monopolized industry into a competitive industry. If economies of scale are unimportant in the industry, the expected result of this movement from monopoly to competition is
A) a reduction in output and an increase in price in the industry.
B) a reduction in both price and output in the industry.
C) an increase in both price and output in the industry.
D) an increase in output and a reduction in price in the industry.

Question

Quizplus · Accepted Answer

When economies of scale are unimportant, moving from monopoly to competition typically leads to increased output and reduced prices due to increased competition and efficiency.

Antitrust Action Restructures a Previously Monopolized Industry into a Competitive