According to the text, a convincing argument against concentration of market power is that
A) Market power increases incentives for innovation and invention.
B) Market power results in lower barriers to entry.
C) The exercise of market power results in a higher price.
D) Large firms can produce more efficiently than small firms because of diminishing returns in production. Economies of scale may help monopolies reduce costs, but because of their market power, they will retain the cost savings rather than pass them along to the consumer in the form of lower prices.

Question

Quizplus · Accepted Answer

The exercise of market power typically allows firms to set higher prices than they would be able to in a more competitive market, which is a key argument against the concentration of market power.

According to the Text, a Convincing Argument Against Concentration of Market