What effect does increasing competition have on price for firms with market power? 1It drives the...
What effect does increasing competition have on price for firms with market power?
1It drives the price down to the level of costs.
2Price enters a cycle of ups and downs.
3It inspires product differentiation and higher prices.
4It pushes the price up above marginal revenue.
Homework Answers
Option 1
Explanation: Increasing competition in such firms lead to lower price and price tends to fall to the level of marginal costs.
Add Answer to:
What effect does increasing competition have on price for firms
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