I've been going through Past Papers and this one has completely stumped me in terms of how to draw the diagram.
The question in itself reads: "A large number of small bakeries in a competitive industry are taken over and combined to form a single monopoly supplier. Assuming constant average costs, what effect will this have on price and output?"
Of which the answer is a decrease in Output and an increase in Price.
It states "Constant average costs" which is pretty straightforward (Perfectly elastic AC:MC).
But the mark scheme has thrown me off slightly, it states "constant AC and MC(1)with NEW EQUILIBRIUM (?) at new MR = MC (1) showinghigher price on diagram (1) and lower output (1) lossof consumer surplus (1)."
I'm just not sure how I can represent that in a diagram, which I'd like to as the diagram itself gets you all the marks for this question.
I know this isn't an art website, but is there anyway I can visually see what this mark scheme means? Thanks.