A Firm Has Market Power If It Can

question 427

Multiple Choice

A firm has market power if it can

• A)maximize profits.
• B)minimize costs.
• C)influence the market price of the good it sells.
• D)hire as many workers as it needs at the prevailing wage rate.

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Definitions:

Contract with Wholesalers

An agreement between a producer and entities that buy products in bulk, intending to distribute them further.

Undisclosed Principal

In an agency relationship, a principal whose identity is not revealed to the third party by the agent.

Implied Authority

Authority of an agent that is not expressly granted but assumed to be given as necessary to perform tasks related to their job.

Actual Authority

The explicit power granted to an agent or representative by the principal to perform certain acts on their behalf.