Suppose a perfectly competitive market is suddenly transformed into one that operates as a monopoly market.We would expect price to ___,output to _,consumer surplus to _,producer surplus to _,and deadweight loss to ___.

A) rise;fall;rise;rise;fall
B) rise;fall;fall;fall;rise
C) rise;fall;fall;rise;rise
D) fall;rise;rise;fall;fall

Question

Suppose a perfectly competitive market is suddenly transformed into one that operates as a monopoly market.We would expect price to _____,output to _____,consumer surplus to _____,producer surplus to _____,and deadweight loss to _____.

A) rise;fall;rise;rise;fall
B) rise;fall;fall;fall;rise
C) rise;fall;fall;rise;rise
D) fall;rise;rise;fall;fall

Keiyanna Andrews · Accepted Answer

Final Answer : C, Explanation :  When a perfectly competitive market is transformed into a monopoly market, we would expect price to rise, output to fall, consumer surplus to fall, producer surplus to rise, and deadweight loss to also rise. This is because a monopoly market has the power to set higher prices since consumers have no alternative options, resulting in a decrease in output. The decrease in output causes a loss in consumer surplus while increasing producer surplus. Deadweight loss also increases due to the reduced output and high prices, which leads to a market inefficiency. Choice C correctly reflects these changes.

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