In a product market, why would a company owner prefer to face fewer competitors rather than more?
A)Costs of production will be lower when there are fewer companies.
B)With fewer competitors, companies have more market power.
C)With fewer competitors, companies have less market power.
D)Per-unit costs of production rise when the number of companies falls.

Question

Quizplus · Accepted Answer

When there are fewer competitors, each remaining company has a larger share of the market, giving them more power to control prices and maintain higher profit margins. This is known as market power.

In a Product Market, Why Would a Company Owner Prefer