Market Power Is Considered to Be a Market Failure Because

question 131

Multiple Choice

Market power is considered to be a market failure because firms with market power:

• A) Do not respond to consumer demand.
• B) Tend to ignore external costs.
• C) Produce less output than is socially optimal.
• D) Charge a lower price than is socially optimal.

---

Definitions:

Demand Variability

Fluctuations in customer demand over a period, impacting inventory management, production planning, and supply chain efficiency.

Capacity Requirements Planning (CRP)

A process used in manufacturing and production planning to determine the resources needed to meet production goals.