You own a lemonade stand in a competitive market, and as such, you are a price-taking firm. Which of the following events would most likely increase your market power?
A) The government abolishes the system of patents and copyrights.
B) A booming economy increases the demand for lemonade and attracts entry into the market.
C) The average total cost curve for firms in the industry is horizontal.
D) You own exclusive rights to harvest lemons from all domestic citrus orchards.

Question

Quizplus · Accepted Answer

Owning exclusive rights to harvest lemons from all domestic citrus orchards would give you control over a critical input, thereby increasing your market power by limiting competitors' access to necessary resources.

You Own a Lemonade Stand in a Competitive Market, and as Such