A Firm Is Said to Have Market Power If It

question 86

Multiple Choice

A firm is said to have market power if it charges a price ________ of production.

• A) higher than the marginal cost
• B) lower than the marginal cost
• C) equal to the marginal cost
• D) equal to the average fixed cost

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Definitions:

Herfindahl-Hirschman Index

A measure used to evaluate the level of competition within an industry, calculated by squaring the market share of each firm within the industry and then summing the resulting numbers.

Concentration Ratio

A measure used to assess the degree of market concentration by looking at the market share of the largest firms within the industry.

Highly Oligopolized

A market structure characterized by a small number of firms controlling a large market share, leading to limited competition.

Textbook Publishers

Companies specialized in producing and distributing textbooks for educational purposes, covering various subjects and levels of study.