If Marginal Cost Is Constant, What Happens to a Market

question 121

Multiple Choice

If marginal cost is constant, what happens to a market if it alters from perfect competition to monopoly without any change in the position of the market demand curve or any variation in costs?

• A) Consumer surplus increases, and the previously existing deadweight loss decreases.
• B) Consumer surplus increases, and the previously existing deadweight loss increases.
• C) Consumer surplus is eliminated, and an equal-sized deadweight loss is created.
• D) Consumer surplus decreases in size, and a deadweight loss is created.

---

Definitions:

Statistics Student

An individual engaged in the study of statistics, focusing on the collection, analysis, interpretation, and presentation of data.

Chlorine Level

The concentration of chlorine present in a given volume of water, often measured to ensure water is safe for drinking or swimming.

Null Hypotheses

The default position that there is no relationship or effect between the variables being studied, serving as a starting point for statistical testing.

Alternative Hypotheses

A statement in hypothesis testing that is directly opposed to the null hypothesis, suggesting there is statistical evidence of an effect.