You own a lemonade stand in a competitive market,and as such,you are a price-taking firm.Which event would MOST likely increase your market power?
A)The government abolishes the system of patents and copyrights.
B)A booming economy increases the demand for lemonade and attracts entry into the market.
C)The average total cost curve for firms in the industry becomes horizontal.
D)You acquire exclusive rights to harvest lemons from all domestic citrus orchards.

Question

Quizplus · Accepted Answer

By acquiring exclusive rights to harvest lemons from all domestic citrus orchards, you would have a monopoly on the raw material needed to make lemonade. This would give you significant market power as other firms would not have access to the same resources as you, allowing you to potentially raise prices without fear of losing customers to competitors.

You Own a Lemonade Stand in a Competitive Market,and as Such,you