Consider a college that has only ever had one on-campus bookstore.Over the last two years you have observed that book prices are 20% lower.You conclude that

Question

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The fact that book prices have decreased by 20% suggests that the bookstore was able to charge a higher price before due to its position as a monopolist. However, the presence of online competitors has likely forced the bookstore to lower its prices in order to remain competitive. As a result, the bookstore may be behaving as an insecure monopolist, trying to maintain its market power despite the presence of competition. The other options are less likely explanations for the observed decrease in prices.

Consider a College That Has Only Ever Had One On-Campus