When Unregulated Monopolies Exist

question 145

Multiple Choice

When unregulated monopolies exist,

• A)Prices tend to be higher than with a competitive market.
• B)Quality tends to be higher than with a competitive market.
• C)Production tends to be higher than with a competitive market.
• D)Externalities occur.

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Definitions:

Market Power

Market power is the ability of a firm or a group of firms to raise and maintain prices at above-normal levels, influencing the terms and conditions of a particular market.

Elastic

Describes how the amount of a good that is demanded or supplied changes in reaction to a price adjustment.

Imperfectly Competitive

Describes markets where individual sellers have some control over the price of their products, unlike in perfect competition.

Price Takers

Firms or individuals who accept the market price as given and have no influence over it due to the competitive nature of the market.