Which of the following are sources of market power?
I. government-issued patents and copyrights
II. a Minnesota law requiring all new funeral homes to have an embalming room, which costs upward of $30,000, whether or not it is functional or will be used
III. a Portland, Oregon law that makes it a crime for limousine companies to charge less than $50 per ride

Question

Quizplus · Accepted Answer

Market power can arise from various sources including government regulations and legal protections. Government-issued patents and copyrights (I) grant exclusive rights to use and sell certain products or ideas, creating a barrier to entry. Laws that impose costly requirements on businesses, such as the Minnesota law requiring embalming rooms in funeral homes (II), can limit competition by increasing the cost of entry. Similarly, laws that set minimum prices, like the Portland, Oregon law regarding limousine ride charges (III), can also create market power by preventing companies from competing on price.

Which of the Following Are Sources of Market Power