Suppose that a perfectly competitive industry is monopolized.If the costs of production remain unchanged,which of the following statements is correct?
A)Both the price and the output of the perfectly competitive industry will be higher than those of the monopoly industry.
B)Both the price and the output of the perfectly competitive industry will be lower than those of the monopoly industry.
C)The perfectly competitive price will be higher,and the output will be lower.
D)The perfectly competitive price will be lower,and the output will be higher.
E)Output and price will remain unchanged.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms produce at the point where price equals marginal cost, leading to lower prices and higher output compared to a monopoly, where the monopolist sets a higher price to maximize profit, resulting in lower output.

Suppose That a Perfectly Competitive Industry Is Monopolized