In order to exercise control over the price of its product, a firm must be able to ________ competition.

Question

BlackTom AI · Accepted Answer

Question restatement: In order to exercise control over the price of its product, a firm must be able to ________ competition.

Option 1: maximize
This would imply the firm seeks to increase its price or profits by pushing for greater market power, but without the ability to influence or limit competition, price control is unstable or unsustainable due to substitutes, entrants, or price wars. Thus this option misstates the necessary condition for price control.

Option 2: increase
Increasing competition generally reduces a firm's ability to set prices, as more rivals or substitute options limit pricing power. Therefore, this option contradicts the idea of exercising price control and is not a suitable condition.

Option 3: not change
If competition remains unchanged, a firm still faces market forces that constrain pricing unless there is some barrier to entry or market power. Simply not changing competition does not describe a mechanism that enables price control, making this option incorrect.

Option 4: limit
To effectively control price, a firm typically needs some degree of market power granted by limited competition—through barriers to entry, brand loyalty, economies of scale, or other competitive constraints. Limiting competition creates the opportunity to influence or set prices rather than having them set by many competing firms. This aligns with economic theory on price setting and market dynamics, making this option correct.

FIN-2800-4 Market Structure

In order to exercise control over the price of its product, a firm must be able to ________ competition.

查看解析

登录即可查看完整答案

类似问题

Which type of firm has the most market power?

Question at position 63 Who had market power before national advertising?wholesalersshop keepersthe governmentmanufacturersconsumers

Question at position 62 Who had market power after national advertising?wholesalersconsumersthe governmentshop keepersmanufacturers

Choose the sources of market power for a monopoly from the following options. (multiple correct answers may be possible)

.Which of the following firms is most likely to have market power? a. a grocery store in a metropolitan area b. a convenience store in a suburb c. a pub in a college town d. the only gasoline station in a rural area

A profit-maximising firm with market power is most likely to use that market power to

A profit-maximising firm with market power is most likely to use that market power to

A profit-maximising firm with market power is most likely to use that market power to

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单