When a producer can control the market price for the good it sells,the producer
A)Is an entrepreneur.
B)Is certain to make a profit.
C)Has market power.

Question

Quizplus · Accepted Answer

When a producer has the ability to control the market price for the good it sells, it is said to have market power. This means that the producer has some degree of monopoly power or is part of an oligopoly in which a few firms dominate the market. Such a producer can raise prices without losing too many customers, ensuring that it earns larger profits. However, having market power does not guarantee profits as it depends on the demand for the good and the elasticity of consumer behavior.

When a Producer Can Control the Market Price for the Good