When the company can sell its products above competitive prices or when its costs are below those of its primary competitor, the company has
A) economies of scope.
B) acquisitive strength.
C) market power.
D) financial leverage.

Question

Quizplus · Accepted Answer

When a company can sell its products above competitive prices, it has market power. This means that it can set prices higher than its competitors and still maintain a significant share of the market. Alternatively, if the company's costs are below those of its primary competitor, it can price its products lower and still make a profit, giving it market power as well.

When the Company Can Sell Its Products Above Competitive Prices