Which of the following statements about market power is TRUE?
A)All sellers that have market power will have equal market power.
B)Markets can have power, but sellers cannot have market power.
C)The extent of market power held by a seller can vary along a spectrum from none to a high level.
D)There are two types of sellers, those with no market power and those with complete market power.

Question

Quizplus · Accepted Answer

Market power is the ability of a seller to influence the price or quantity of a good or service in the market. It is not necessary that all sellers with market power will have equal market power. The extent of market power held by a seller can vary along a spectrum from none to a high level. Therefore, option C is the true statement about market power. Options A, B, and D are incorrect statements as they do not accurately describe the concept of market power.

Which of the Following Statements About Market Power Is TRUE