ECONOMICS
CONSUMERS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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side effects that may occur in a market.
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government regulations imposed on the sellers in a market.
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ability of market participants to influence price.
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forces of supply and demand in determining equilibrium price.
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Detailed explanation-1: -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-2: -There are three crucial sources of market power: Demand elasticity, high barriers to market entry or exit, and a number of market competitors.
Detailed explanation-3: -Market power refers to the power of a single person or small group to influence market prices. Market power is characterized by an entity’s ability and capacity or a small number of firms to determine and influence the level of prices in a market economy.
Detailed explanation-4: -Number of competitors in a market. Elasticity of demand. Product differentiation. Ability of companies to make above “normal profit” Pricing power. Perfect information. Barriers to entry or exit. Factor mobility. 18-Dec-2022