The figure shows the market demand curve for penicillin, an antibiotic medicine. Initially, themarket was supplied by perfectly competitive firms. Later, the government granted the exclusiveright to produce and sell penicillin to one firm. The figure also shows the marginal revenue curve(MR) of the firm once it begins to operate as a monopoly. The marginal cost is constant at $3.irrespective of the market structure.After the market changes from perfect competition to a monopoly..OA. social surplus decreasesOB. consumer surplus increases.OC. deadweight loss decreasesOD. the market price decreases-COD-Price/Cost (5)109102030MR40 60 00Demand70BOso Quanety(units)

A perfectly competitive market structure has a large no of sellers and buyers, this makes it…

Answered: After the market changes from perfect…

After the market changes from perfect competition to a monopoly.. OA. social surplus decreases B. consumer surplus increases C. deadweight loss decreases OD. the market price decreases

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter8: Monopoly

Section: Chapter Questions

Problem 12SQP

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Question

The figure shows the market demand curve for penicillin, an antibiotic medicine. Initially, the
market was supplied by perfectly competitive firms. Later, the government granted the exclusive
right to produce and sell penicillin to one firm. The figure also shows the marginal revenue curve
(MR) of the firm once it begins to operate as a monopoly. The marginal cost is constant at $3.
irrespective of the market structure.
After the market changes from perfect competition to a monopoly..
OA. social surplus decreases
OB. consumer surplus increases.
OC. deadweight loss decreases
OD. the market price decreases
-COD-
Price/Cost (5)
10
9
10
20
30
MR
40 60 00
Demand
70
BO
so Quanety
(units)

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