In an economy where inflation expectations are firmly anchored, a widespread increase in firms' market power that allows them to raise their profit margins will cause a movement up along the existing Phillips curve, leading to higher inflation at a lower level of unemployment.
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In an economy where inflation expectations are firmly anchored, a widespread increase in firms' market power that allows them to raise their profit margins will cause a movement up along the existing Phillips curve, leading to higher inflation at a lower level of unemployment.