Market power may result from

Question

Quizplus · Accepted Answer

Control of resources can give a firm market power by limiting the supply of a good or service and giving the firm the ability to control the price. This is often seen in industries where there are limited natural resources, such as oil or diamonds. Antitrust policy is designed to prevent market power and promote competition, so it does not result in market power. Flawed price signals can result in inefficient market outcomes, but they do not necessarily give a firm market power. Merit goods are goods that are considered socially desirable regardless of their market demand, such as healthcare or education, and do not relate to market power.

Market Power May Result from