Market power is the ability of a firm to

Question

Quizplus · Accepted Answer

Market power refers to the ability of a firm to control the price and quantity supplied. This means that the firm has the ability to influence the market by setting its own price and output levels. A firm with market power is able to operate independently of the competitive forces in the market and has the ability to earn substantial profits. Therefore, option C is the correct choice. Option A, advertising, is not necessarily an indicator of market power, as even firms with no market power can advertise. Option B, acting as a price taker, indicates that the firm has no market power as it has to accept the market price.

Market Power Is the Ability of a Firm to