The figure below shows the market equilibrium (point B) at the intersection of demand and supply curves under perfect competition.Figure 11.5
D: Market demand curve
S: Market supply curve
-Assume that in Figure 11.5, the market is originally perfectly competitive but then becomes a monopoly. Compared with perfect competition, a monopoly would have:

Question

The figure below shows the market equilibrium (point B) at the intersection of demand and supply curves under perfect competition.Figure 11.5

D: Market demand curve
S: Market supply curve
-Assume that in Figure 11.5, the market is originally perfectly competitive but then becomes a monopoly. Compared with perfect competition, a monopoly would have:

Quizplus · Accepted Answer

When the market changes from perfect competition to a monopoly, the price will increase from PC to PM and the quantity will decrease from QS1U1B1 to QM. This decrease in quantity leads to a deadweight loss, which is the area between the original supply and demand curves and the new monopoly demand curve. Additionally, the monopoly will have a lower consumer surplus (as consumers will have to pay a higher price) and a higher producer surplus (due to the higher price received). Therefore, the correct choice is D, as a monopoly will have a deadweight loss.

The Figure Below Shows the Market Equilibrium (Point B) at the Intersection