The ability of a monopolist to raise the price of a product above the competitive level by reducing the output is known as:
A)product differentiation.
B)barrier to entry.
C)market power.
D)patents and copyrights.

Question

Quizplus · Accepted Answer

Market power refers to the ability of a firm to influence the market price of a good or service. In the case of a monopolist, they have complete control over the production and supply of a particular product, which allows them to raise the price above the competitive level by reducing the output. This is because there are no close substitutes for the product, and consumers have no choice but to pay the higher price if they want to purchase it.

The Ability of a Monopolist to Raise the Price of a Product