Which of the Following Would Take Place If a Competitive

question 73

Multiple Choice

Which of the following would take place if a competitive firm acquired monopoly power in the market through economies of scale and became a natural monopoly?

• A)Producer surplus will increase and consumer surplus will fall
• B)Consumer surplus will be transferred to producers resulting in a deadweight loss
• C)Consumer surplus will fall but will not affect producer surplus
• D)A deadweight loss will arise in the market equal to the fall in producer surplus