If a perfectly competitive industry was suddenly monopolized without any change in cost conditions,
A) price would increase and quantity produced would decrease.
B) price would decrease and quantity produced would increase.
C) there would be no change in either price or quantity produced.
D) both price and quantity produced would decrease.
E) both price and quantity produced would increase.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, price is equal to marginal cost and the quantity produced is at the efficient level. However, when the industry is monopolized, the monopolist would charge a higher price than the competitive market price, leading to a decrease in the quantity produced. Thus, if a perfectly competitive industry is monopolized without any change in cost conditions, price would increase and quantity produced would decrease.

If a Perfectly Competitive Industry Was Suddenly Monopolized Without Any