Which Statement About Market Power Is Incorrect

question 101

Multiple Choice

Which statement about market power is incorrect?

• A)It can lead to price increases that exploit consumers.
• B)It can lead to resource misallocation.
• C)It can lead to inefficient production and the lack of innovation.
• D)Monopoly power can lead to decreases in producer surplus.

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Definitions:

United States Depression

A period of severe economic downturn and high unemployment in the United States, with the most famous being the Great Depression of the 1930s.

Output

Output refers to the total quantity of goods or services produced by a firm, industry, or economy within a given period.

Roaring Twenties

A period in the 1920s characterized by rapid economic growth, technological innovation, and cultural shifts in the United States and Europe, often associated with prosperity and social change.

Early 1930s

A period marked by the Great Depression, characterized by widespread economic hardship, high unemployment, and deflation.