What is defined as the ability of a firm to earn high profits by raising and keeping the prices of its products substantially above the levels at which those products would be priced in competitive markets?
A)Economies of scope
B)Tacit collusion
C)Monopoly power
D)Perfect competition

Question

Quizplus · Accepted Answer

Monopoly power is defined as the ability of a firm to earn high profits by raising and keeping the prices of its products substantially above the levels at which those products would be priced in competitive markets. Economies of scope refer to the cost advantages a firm can achieve by producing multiple products or services. Tacit collusion refers to the informal cooperation between firms to limit competition and maintain higher prices. Perfect competition refers to a market structure where there are many small firms selling homogeneous products and no single firm has the power to affect the market price.

What Is Defined as the Ability of a Firm to Earn