A firm that has market power has the ability
A) to affect the price of its own product.
B) to conduct illegal activities without fear of prosecution.
C) to command consumer to buy any quantity from them.
D) to drive its competition out of the market.

Question

Quizplus · Accepted Answer

A firm with market power has the ability to impact the price of its own product. This means that the firm can choose to increase or decrease the price of their product based on their own interests and without being subject to strong competition. This is often seen in monopolies or oligopolies, where there are few or no viable competitors in a particular market. However, it does not mean that the firm can conduct illegal activities, command consumers to buy its products or drive its competition out of the market without consequences.

A Firm That Has Market Power Has the Ability