A firm that has a great deal of control over the price of a good is said
A)to function in a black market.
B)to create a tax incidence.
C)to have monopoly power.
D)to be in an antitrust position.

Question

Quizplus · Accepted Answer

When a firm has a great deal of control over the price of a good or service, it is said to have monopoly power. This means that the firm is the sole provider of the good or service, or at least the dominant provider, with no close substitutes available. As a result, the firm can charge higher prices than it would be able to in a more competitive market. This is because consumers have limited options and are therefore forced to pay whatever price the firm sets. Monopoly power is often associated with antitrust concerns, and may be subject to government regulation.

A Firm That Has a Great Deal of Control Over