Which of the Following Is True in Relation to Market

question 31

Multiple Choice

Which of the following is true in relation to market share and monopoly power?

• A) Market share is rarely used as a test of monopoly power because it is difficult to determine.
• B) A market share greater than 50% generally indicates monopoly power.
• C) A market share between 50 and 75% is, in itself, inconclusive in determining monopoly power.
• D) Market share is a common test for monopoly power because it is an easy, objective measurement for courts to determine.

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Definitions:

Efficient Scale

The level of production that minimizes the average total cost of production, optimizing resource usage.

Competitive Firm

A company that operates in a market where prices are determined through competition amongst businesses.

Firm's Profit

The financial gain a company achieves when its total revenues exceed the total costs incurred in conducting its business activities.

Efficient Scale

The level of production at which the average total costs of production are minimized.