-Suppose the grocery store market in Kansas City is perfectly competitive.Then one store buys all the others and becomes a single-price monopoly.The figure above shows the relevant demand and cost curves.When the market is perfectly competitive,the price of a pound of steak is ________ and when it is a monopoly,the price of a pound of steak is ________.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the price is determined by the intersection of the supply and demand curves, which typically results in a lower price due to competition. When the market becomes a monopoly, the single seller maximizes profit by producing where marginal cost equals marginal revenue, which often results in a higher price than in a competitive market. Without the specific figures, the general principle suggests that moving from a competitive market to a monopoly would increase the price of goods, making option C the most plausible choice given the structure of the question.

-Suppose the Grocery Store Market in Kansas City Is Perfectly