A company that can offer a product at a much lower price due to some advantage holds ___.

• A. price discrimination power
• B. a monopoly
• C. a competitive advantage
• D. perfect competition

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of 'competitive advantage' in microeconomics. It refers to a firm's ability to produce goods or services at a lower cost or with better quality than its competitors, allowing it to offer lower prices or better value.
2. Step 2: Review the other options: 'price discrimination power' refers to charging different prices to different consumers; 'a monopoly' means a single seller dominates the market; 'perfect competition' involves many sellers with no single firm able to influence prices.
3. Step 3: Recognize that the problem states the company can offer a product at a much lower price due to some advantage, which aligns with the definition of 'competitive advantage'.
4. Step 4: Conclude that the correct term to fill in the blank is 'a competitive advantage' because it directly describes the firm's ability to offer lower prices due to its advantage.
5. Step 5: Summarize that understanding these key microeconomic concepts helps distinguish between market structures and firm capabilities, clarifying why 'competitive advantage' is the best fit here.