Assume There Is a Decrease in the Number of Substitutes

question 23

Multiple Choice

Assume there is a decrease in the number of substitutes for a good produced by a profit-maximizing price-setting firm.All else constant,this would cause the firm's ability to markup price above average cost to:

• A)decrease.
• B)stay the same.
• C)increase.
• D)cannot be determined with the information given.