The Alternative with the Most Market Power in the Current

question 21

Multiple Choice

The alternative with the most market power in the current marketplace is:

• A) administered competition.
• B) consumer-driven competition.
• C) oligopolistic competition.
• D) all of the above.

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Definitions:

Diminishing Marginal Returns

A principle stating that if one factor of production is increased while others remain constant, the overall returns will gradually decrease after a certain point.

Long-Run Average Cost Curves

A graphical representation showing the average cost per unit of output over a long period, where all inputs, including capital, are variable.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, leading to a reduction in average costs per unit as output increases.

Diseconomies of Scale

The situation in which a business grows so large that the costs per unit increase, as opposed to economies of scale where costs per unit decrease with the increase in output.