Under which of the following scenarios is it most likely that monopoly power will be exhibited by firms?

Question

Quizplus · Accepted Answer

Monopoly power is more likely to be exhibited by firms when there are few firms in the market and the demand curve faced by each firm is relatively inelastic. In this scenario, the firm has more control over the price and can raise prices without losing too many customers because the customers have few alternatives to choose from. This gives the firm monopoly power.

Under Which of the Following Scenarios Is It Most Likely