If a perfectly competitive industry is monopolized,consumer surplus _____
A)can be expected to decrease.
B)usually remains constant.
C)becomes equal to producer surplus.
D)becomes double the amount of producer surplus.
E)increases from zero to a high value.

Question

Quizplus · Accepted Answer

When a perfectly competitive industry is monopolized, the monopolist gains market power and the ability to set a higher price than the competitive market price. This results in a decrease in consumer surplus since consumers are now paying a higher price for the same product. Therefore, the correct answer is (A) can be expected to decrease.

If a Perfectly Competitive Industry Is Monopolized,consumer Surplus _____