The Power to Raise Price Above Marginal Cost Without Fear

question 165

Multiple Choice

The power to raise price above marginal cost without fear that other firms will enter the market is:

• A) market power.
• B) firm power.
• C) marginal power.
• D) cost power.

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Definitions:

Long-run Equilibrium

A state in which all factors of production and costs are variable, and firms are making neither excess profits nor losses.

Short-run Equilibrium

Short-run Equilibrium occurs in a market when the quantity supplied equals the quantity demanded at a specific price level, without considering changes in the long run.

Market Participants

Individuals or entities engaging in the buying, selling, or exchange of goods and services in a market.

Standardized

Established to have uniform procedures, dimensions, materials, or tests, to ensure consistency and comparability across different entities or products.