If Marginal Cost Is Constant, What Happens to a Market

question 76

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 decreases, producer surplus increases and a deadweight loss is created.
• B) Consumer surplus decreases, producer surplus decreases and a deadweight loss is created.
• C) Consumer surplus increases, producer surplus decreases and a deadweight loss is created.
• D) Consumer surplus increases, producer surplus increases and a deadweight loss is created.

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