Asked by
Kelsey Burdorff
on Oct 27, 2024
Verified
You own a lemonade stand in a competitive market,and as such,you are a price-taking firm.Which event would MOST likely increase your market power?
A) The government abolishes the system of patents and copyrights.
B) A booming economy increases the demand for lemonade and attracts entry into the market.
C) The average total cost curve for firms in the industry becomes horizontal.
D) You acquire exclusive rights to harvest lemons from all domestic citrus orchards.
Price-Taking Firm
A price-taking firm is a company that must accept the market price for its product, having no influence on the price due to its small size relative to the industry.
Market Power
The ability of a firm to control the price and output of products in its market, often due to limited competition.
- Explain the role of government and regulations in monopolies and market entry.
Verified Answer
TP
Learning Objectives
- Explain the role of government and regulations in monopolies and market entry.