A Firm That Has Substantial Monopoly Power

question 205

Multiple Choice

A firm that has substantial monopoly power

• A)confronts a perfectly-elastic demand curve.
• B)can sell as much as it wants at the price it chooses.
• C)can strongly influence the price that it charges for its output.
• D)is one of only a few firms in the industry.

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Definitions:

Clayton Act

A U.S. Antitrust law enacted in 1914 aimed at promoting fair competition and preventing unfair business practices, including price discrimination and exclusive dealings.

Price Discrimination

The selling of a product to different buyers at different prices when the price differences are not justified by differences in cost.

Tying Contracts

Agreements where the seller of a product or service requires the buyer to also purchase a secondary product or service.

Sherman Act

A landmark federal statute in the field of U.S. antitrust law passed in 1890 to protect competition and prohibit monopolistic practices.