ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Important features of a market, including the number of buyers and sellers, product uniformity across sellers, ease of entering the market, and forms of competition
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The ability of a firm to raise its price without losing all sales to rivals
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Restrictions on the entry of new firms into an industry
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The sole supplier of a product with no close substitutes
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Detailed explanation-1: -Market power (MP) is the potential of a firm(s) to influence the market price of a good or service by controlling its demand and/or supply. It allows the firm to sets the price of its products as desired without the fear of losing sales. Selling at higher prices enables the firm with MP to rake in substantial profits.
Detailed explanation-2: -market power. Market power allows a firm to change the price of its products without losing its sales to competitors in the market.
Detailed explanation-3: -Market power refers to a company’s relative ability to manipulate the price of an item in the marketplace by manipulating the level of supply, demand or both. In markets with perfect or near-perfect competition, producers have little pricing power and so must be price-takers.
Detailed explanation-4: -Economists use both ‘market power’ and ‘monopoly power’ to refer to the power of a single firm or group of firms to price profitably above marginal cost. [FN37] Less technically, the terms both refer to the ability to price above competitive levels.
Detailed explanation-5: -There are four main types of market power: monopoly, perfect competition, oligopoly, and monopolistic competition. Each type has different features. The monopoly structure is the most extreme example of market power in which one firm has near-total domination over market share and market power.