A monopolist faces a demand curve given by P = 60 2Q and has total costs given by TC = Q2. Its marginal revenue is MR = 60 4Q and its marginal cost is MC = 2Q.

Compared with the no-trade equilibrium, consumer surplus ___________ when the monopolist engages in free trade.

Question 7 options:

a)

decreases

b)

first decreases, then increases

c)

remains the same

d)

increases