Which of the Following Is Evidence of Market Power

question 113

Multiple Choice

Which of the following is evidence of market power?

• A) markup
• B) Output is fixed despite cost changes.
• C) The demand curve for the firm is horizontal.
• D) The firm has perfect control over price.
• E) Optimal output is less than industry output.

---

Definitions:

Capital Equipment

Long-term assets such as machinery, vehicles, or large tools that a business uses in its operations to produce goods or services.

Leverage Ratio

A financial ratio indicating the level of debt used by a company to finance its assets, relative to its equity.

Tax Burden

The total amount of income, property, and sales tax that an individual or corporation must pay to various government agencies.

Interest Burden

The ratio indicating the proportion of a company's pre-tax earnings that are consumed by interest payments.