Asked by Rachael Petersen on Jun 10, 2024
Verified
In a bilateral monopoly, equilibrium price will:
A) favor the seller.
B) favor the buyer.
C) approximate the competitive equilibrium price.
D) not be determined by a simple rule.
Bilateral Monopoly
A market situation involving one seller and one buyer, leading to unique negotiation dynamics over prices and quantities.
- Distinguish among the characteristics of monopsony, monopoly, bilateral monopoly, and oligopsony as they pertain to market structures.
Verified Answer
EK
Evangalen KousourisJun 15, 2024
Final Answer :
D
Explanation :
In a bilateral monopoly, both the buyer and seller have market power, which means that the price will not be determined by a simple rule. The equilibrium price will depend on various factors such as bargaining power, production costs, and demand. Therefore, option D is the correct answer.
Learning Objectives
- Distinguish among the characteristics of monopsony, monopoly, bilateral monopoly, and oligopsony as they pertain to market structures.