The development of market power by a firm is considered to be a market failure because firms with market power will
A. Produce more and charge a lower price than what would be socially optimal.
B. Not respond to consumer demand.
C. Tend to ignore external costs.
D. Produce less and charge a higher price than what would be socially optimal.
Answer: D
Economics
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The supply of labor curve
A) has a negative slope. B) is independent of the wage rate. C) shows how much labor workers are willing to supply at various real wage rates. D) is usually vertical.
Economics
The manager-stockholder conflict generally becomes worse
A) the smaller the firm. B) the larger the firm. C) the more the firm borrows from banks. D) the less the firm borrows from banks.
Economics