The higher the level of market power among the sellers in a market, the _____ when the Rational Rule for Sellers is applied.
A)lower the market output
B)higher the marginal cost
C)closer marginal revenue is to price
D)lower the market demand

Question

Quizplus · Accepted Answer

Market power allows sellers to restrict output to increase prices, leading to lower market output under the Rational Rule for Sellers, which equates marginal revenue with marginal cost.

The Higher the Level of Market Power Among the Sellers