In 2007...

In 2007, the potato chip industry in the Northwest was 
competitively structured and in long-run competitive equilibrium; firms were 
earning a normal rate of return and were competing in a monopolistically 
competitive market structure. In 2008, two smart lawyers quietly bought up all 
the firms and began operations as a monopoly called “Wonks.” To operate 
efficiently, Wonks hired a management consulting firm, which estimated a 
different long-run competitive equilibrium.

1. Given that the new company is now run as a monopoly, how will 
   this benefit the stakeholders involved, such as the government, businesses, and 
   consumers?
2. Given the transition from a monopolistically competitive firm 
   to a monopoly, what will be the changes with regard to prices and output in both 
   of these market structures?
3. What market structure is more beneficial for Wonks to operate 
   in, and will this be the same market structure that will benefit consumers? 

Be sure to explain the reasoning behind each of your 
answers.