A Measure of Monopoly Power Used by the Government Is

question 306

Multiple Choice

A measure of monopoly power used by the government is the

• A) percentage share of the relevant market or market share test.
• B) profit of the firm compared to other firms in the industry.
• C) price charged by the firm for goods and services.
• D) percentage difference between price and marginal cost.

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Definitions:

Market Clearing Level

The price and quantity at which supply equals demand, so there is no surplus or shortage in the market.

Surplus

Situation in which the quantity supplied exceeds the quantity demanded.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where supply equals demand.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a specific price over a given period of time.