Assuming other factors remain constant, Anon would have the most power

QUESTION

Assuming other factors remain constant, Anon would have the most power to raise prices if widgets were which of the following?

A) life-saving drugs
B) automobiles
C) beverages
D) toys
E) jewelry

ANSWER

Answer: A
Explanation: A) Companies have the most power to charge high prices when their products or services are absolutely necessary. People will be more likely to pay high prices when their health is at stake, so Anon would have the most power if widgets were life-saving drugs (Choice A). The other choices involve goods that have plenty of substitutes and/or are not clearly necessary.