Which of the following is the critical determinant of market power?
A) The number of producers.
B) The size of each firm.
C) The extent of barriers to entry.
D) The availability of substitute goods.

Question

Quizplus · Accepted Answer

The extent of barriers to entry is the critical determinant of market power. Barriers to entry can prevent new competitors from entering the market, allowing existing firms to maintain market power and potentially charge higher prices. The other options, such as the number of producers, size of each firm, and availability of substitute goods can all impact market competition, but do not necessarily determine market power on their own.

Which of the Following Is the Critical Determinant of Market