If pizza used to be produced in a perfectly competitive market, and now the pizza market has become a monopoly, we can expect:
A) less pizza to be sold at a higher price.
B) more pizza to be sold at a higher price.
C) less pizza to be sold at a lower price.
D) more pizza to be sold at a lower price.

Question

Quizplus · Accepted Answer

A monopoly has the ability to charge higher prices as they are the sole provider in the market. With fewer firms producing pizzas, there will be less competition leading to higher prices. This may result in a decrease in the quantity of pizzas sold compared to when the market was perfectly competitive.

If Pizza Used to Be Produced in a Perfectly Competitive