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

Question

Quizplus · Accepted Answer

When a perfectly competitive industry is monopolized without any change in cost conditions, the new monopolist would have the power to restrict output and increase the price, resulting in a decrease in quantity produced and an increase in price. This is because a monopolist can earn higher profits by producing less output at a higher price. Therefore, the correct answer is (C) price would increase and quantity produced would decrease.

If a Perfectly Competitive Industry Was Suddenly Monopolized Without Any