Narrbegin Exhibit 8.7
-According to Exhibit 8.7, if competition was introduced in a monopoly market, we could expect which of the following to occur?

Question

Narrbegin Exhibit 8.7  
-According to Exhibit 8.7, if competition was introduced in a monopoly market, we could expect which of the following to occur?

Quizplus · Accepted Answer

The introduction of competition in a monopoly market will lead to a decrease in the price charged by the monopoly, and an increase in the output produced. This is because the monopoly will have to lower its price and increase its output to remain competitive in the market. In Exhibit 8.7, we can see that the price falls from P₀ to P₁, and the output rises from Q₁ to Q₂ when competition is introduced. Therefore, option A is the best choice.