Asked by Johnny Schinas on Jul 15, 2024
Verified
Which of the following is NOT associated with a high degree of monopoly power?
A) A relatively inelastic demand curve for the firm
B) A small number of firms in the market
C) Significant price competition among firms in the market
D) Significant barriers to entry
Inelastic Demand
Describes a situation where the demand for a product does not change significantly in response to a change in the product's price.
Barriers to Entry
Obstacles that make it difficult for new competitors to enter a market, such as high startup costs, strict regulations, or strong brand loyalty.
- Master the idea of monopoly and identify the conditions facilitating a firm's monopoly power exertion.
Verified Answer
CR
Christian RiveraJul 22, 2024
Final Answer :
C
Explanation :
Price competition among firms in the market indicates that there are multiple players with relatively equal market power, making it less likely for one firm to have a high degree of monopoly power. A relatively inelastic demand curve, a small number of firms, and significant barriers to entry are factors associated with a higher degree of monopoly power.
Learning Objectives
- Master the idea of monopoly and identify the conditions facilitating a firm's monopoly power exertion.