Monopoly power is a measure of
A) a firm's ability to set prices.
B) the uniqueness of a firm's product.
C) the existence of close substitutes for a firm's product.
D) a firm's ability to overcome barriers to entry in its market.
E) a firm's profitability.

Question

Quizplus · Accepted Answer

Monopoly power refers to a firm's ability to set prices for its product or service. When a firm has significant market power, it can charge higher prices and earn larger profits than in a more competitive market. This ability to set prices is often due to barriers to entry that limit competition, such as high startup costs, patents, or control over essential resources.

Monopoly Power Is a Measure of