How is the result of the Rational Rule for Sellers different for companies with market power versus companies with no market power?
A)The price is lower for companies with market power.
B)The price is higher for companies with market power.
C)The demand is lower for companies with market power.
D)The demand is higher for companies with market power.

Question

Quizplus · Accepted Answer

The Rational Rule for Sellers states that companies will produce where marginal cost equals marginal revenue. However, for companies with market power, they can charge a higher price since they have some degree of control over the market. This means that the price will be higher for companies with market power compared to those with no market power.

How Is the Result of the Rational Rule for Sellers