Which of the following would indicate a relatively large amount of market power? Select one: a

Marketing Jan 15, 2021

Which of the following would indicate a relatively large amount of market power?

Select one:

a. A high price elasticity of demand.

b. A high cross-price elasticity with other products.

c. A highly inelastic demand.

d. Low Learner index.

Expert Solution

Which of the following would indicate a relatively large amount of market power?

c. A highly inelastic demand._

A highly inelastic demand will provide a relatively large amount of market power. A highly inelastic demand represents a situation where a firms product sales are not affected by changes in prices but the demand remains constant irrespective of changes in price either upward or downwards. When demand of a commodity is inelastic, an increase in the price of the commodity will not lower its demand thus the firm will continue earning revenue through the season.

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