Control over price by individual firms is highest in a(n) ______.

Question

Quizplus · Accepted Answer

In a pure monopoly, there is only one firm in the market, and it has complete control over the price it charges for its products. The firm can set a high price to increase profits, but it must also consider the demand for its products to ensure that it does not lose customers to cheaper substitutes. In a regulated monopoly, the government sets the price that the firm can charge, limiting its control over pricing. In an oligopoly, a few large firms dominate the market and can collude to set prices together. In a monopolistically competitive industry, there are many small firms, each with a small degree of control over price through product differentiation.

Control Over Price by Individual Firms Is Highest in A(n)