When a perfectly competitive industry is taken over by a monopoly,some consumer surplus is transferred to the monopolist in the form of
A) marginal cost.
B) economic profit.
C) deadweight loss.
D) taxes.
E) average variable cost.

Question

Quizplus · Accepted Answer

When a monopoly is formed, it gains more pricing power and can charge a higher price than what the perfectly competitive industry charged. This leads to some of the consumer surplus being transferred to the monopolist in the form of economic profit.

When a Perfectly Competitive Industry Is Taken Over by a Monopoly,some