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For each of the following, state the effect of monopoly on the equilibrium market outcome compared...

For each of the following, state the effect of monopoly on the equilibrium market outcome compared with perfect competition:

Price of output:

a. increases

b. decreases

c. remains constant

Quantity of output:

a. increases

b. decreases

c. remains constant

MC at the equilibrium output:

a. increases

b. decreases

c. remains constant

MU at the equilibrium output:

a. increases

b. decreases

c. remains constant

Producer surplus

a. increases

b. decreases

c. remains constant

Consumer surplus

a. increases

b. decreases

c. remains constant

Producer profit

a. increases

b. decreases

c. remains constant

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Answer #1

In monopoly there is single firm and the firm has market power.

Price - increases

Quantity - decreases

MC- decreases

MU - increases

Producer surplus - increases

Consumer surplus - decreases

Producer profit - increases

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