If a perfectly competitive market becomes a monopoly and the costs do not change, which of the following allocations of costs and benefits applies?
A) The producer benefits, but consumers and society are harmed.
B) The producer and society are harmed, but consumers benefit.
C) The producer and society benefit, but consumers are harmed.
D) The producer is harmed, but consumers and society benefit.

Question

Quizplus · Accepted Answer

In a monopoly, the producer can set higher prices than in a competitive market, leading to higher profits for the producer. However, consumers face higher prices and reduced output, leading to a loss in consumer surplus and a deadweight loss to society, thus harming both consumers and society.

If a Perfectly Competitive Market Becomes a Monopoly and the Costs