According to the Text, a Convincing Argument Against Concentration of Market

question 103

Multiple Choice

According to the text, a convincing argument against concentration of market power is that

• A) Market power increases incentives for innovation and invention.
• B) Market power results in lower barriers to entry.
• C) The exercise of market power results in a higher price.
• D) Large firms can produce more efficiently than small firms because of diminishing returns in production. Economies of scale may help monopolies reduce costs, but because of their market power, they will retain the cost savings rather than pass them along to the consumer in the form of lower prices.

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Definitions:

Echolocation

A biological sonar used by several kinds of animals, such as bats and dolphins, to navigate and locate prey by emitting sound waves and listening for echoes.

High-Pitched Sounds

Sounds that have a frequency at the higher end of the human hearing range.

Olfaction

The sense of smell, a chemical sensing system detecting odors or scents, crucial for taste perception and hazard detection.

Electromagnetic Receptors

Sensory receptors in certain organisms that can detect electromagnetic fields, facilitating navigation, prey location, or communication.