A firm that has substantial monopoly power
A)confronts a perfectly-elastic demand curve.
B)can sell as much as it wants at the price it chooses.
C)can strongly influence the price that it charges for its output.
D)is one of only a few firms in the industry.

Question

Quizplus · Accepted Answer

A firm with substantial monopoly power can strongly influence the price that it charges for its output. While it may not always be able to sell as much as it wants at the price it chooses, it does have the ability to exert significant control over the market and can charge prices higher than in a more competitive market. Additionally, a perfectly-elastic demand curve is characteristic of a perfectly competitive market, not a monopoly. Finally, while a monopolistic firm may be one of only a few in the industry, this is not necessarily a defining characteristic of monopoly power.

A Firm That Has Substantial Monopoly Power