The functional interchangeability test helps to determine if:
A) a firm controls a very high percentage share of the relevant market.
B) the defendant had an anticompetitive intent.
C) there has been joint action.
D) the plaintiff has standing to bring an antitrust suit.

Question

Quizplus · Accepted Answer

Monopoly power exists when a firm controls a very high percentage share of the relevant market. There are two components to a relevant market determination: the geographic market and the product market. The relevant product market is composed of those products that are "reasonably interchangeable by consumers for the same purposes" (the functional interchangeability test). The idea here is that a firm's power to fix price is limited by the availability of competing products that buyers find acceptable.

The Functional Interchangeability Test Helps to Determine If