The Exercise of Market Power by Suppliers in Resource Markets

question 57

Multiple Choice

The exercise of market power by suppliers in resource markets tends to

• A)reduce income inequality, ensuring that all workers receive fair wages.
• B)have little impact on the distribution of income.
• C)increase income inequality by raising incomes of those able to "rig the market."
• D)increase income inequality but is offset by the exercise of market power in product markets.

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Definitions:

Surplus

The situation in which the quantity of a good or service supplied exceeds the quantity demanded, often leading to lower prices.

Unregulated Market

A market where economic activities operate without direct governmental control, often resulting in high competition and consumer choice but potentially also in market failures.

Price Fall

A decrease in the cost of goods or services in the market, often leading to increased consumer demand.

Supply Of Peaches

The total quantity of peaches that producers are willing and able to sell at a given price over a specified time period.