Suppose a market is initially perfectly competitive with manyfirms selling an id

Question

Suppose a market is initially perfectly competitive with manyfirms selling an identical product. Over time, however,suppose the merging of firms results in the market being served byonly three or four firms selling this same product. As aresul, we would expect. a.an increase in market output and an increse in the price ofthe product. b.an increase in market output and a decrease in the price ofthe product. c.a decrease in market output and an increase in the price ofthe product. d.a decrease in market output and a decrease in the price ofthe product. Suppose a market is initially perfectly competitive with manyfirms selling an identical product. Over time, however,suppose the merging of firms results in the market being served byonly three or four firms selling this same product. As aresul, we would expect. a.an increase in market output and an increse in the price ofthe product. b.an increase in market output and a decrease in the price ofthe product. c.a decrease in market output and an increase in the price ofthe product. d.a decrease in market output and a decrease in the price ofthe product.

Explanation / Answer

B. an increase in market output and a decrease in the price of the product

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