Assume a hypothetical case where an industry begins as perfect competition and then becomes a monopoly. as a result of this change, a. consumer surplus will be smaller, producer surplus will be greater, and there will be a reduction in economic efficiency. b. consumer surplus will be smaller and producer surplus will be greater. there will be a net increase in economic surplus. c. price will be higher, consumer surplus will be greater, and output will be greater. d. price will be higher, output will be lower, and the deadweight loss will be eliminated.

The correct answer is A. consumer surplus will be smaller, producer surplus will be greater, and there will be a reduction in economic efficiency.

Explanation:

Monopoly is a form of market totally opposed to perfect competition. It is part of the so-called "imperfect competition", those markets that do not meet the assumptions of perfect competition.

Three situations can be distinguished:

However, when we talk about monopoly in general, we refer to the offer that is what we are going to focus on.

In this type of market, the monopoly company has the power to set prices and quantities since there is no competition. The monopolist will offer a smaller quantity at a higher price than if the market were of perfect competition. In addition, having the sale insured, the company does not care about product quality or consumer satisfaction.

i think it is sales-oriented, but i am not sure

was my answer wrong?