Monopoly power is the ability of a firm to
A) have full information of market opportunities
B) produce the output level where average total cost is a minimum
C) influence price in a market by producing more or less
D) produce and sell the type of product that the consumer wants

Question

Quizplus · Accepted Answer

Monopoly power refers to the ability of a firm to influence the price of a product or service in the market by adjusting its supply. Unlike in a perfectly competitive market where firms are price takers, a monopolist can set prices above marginal cost to maximize profits, due to the lack of close substitutes for its product.

Monopoly Power Is the Ability of a Firm to