When an input seller has market power in the input market, its customers:
A)have the ability to charge a higher price for their products.
B)may earn higher profits.
C)gain market power in their product markets.
D)may end up paying a higher price for inputs.

Question

Quizplus · Accepted Answer

When an input seller has market power, they can charge a higher price for their inputs, which ultimately leads to their customers paying a higher price for the inputs they need to produce their products. This can result in lower profits for the customer and potentially even reduce their market power in their respective product markets.

When an Input Seller Has Market Power in the Input