Sellers in ________ are likely to have the highest market power.

Question

Quizplus · Accepted Answer

Monopolies have total control over the market as they are the sole supplier of a product or service. Due to the absence of competitors, they have the highest market power and can charge higher prices without losing their customers. This is because there are no close substitutes available for consumers. In contrast, in perfect competition, the market power of sellers is minimal as there are numerous competitors selling identical products. In monopolistic competition, although sellers have some market power, it is far less significant than in a monopoly. In an oligopoly, a few firms dominate the market, but their market power is limited to mutual interdependence as they need to consider the reactions of their competitors before making any decisions.

Sellers in ________ Are Likely to Have the Highest Market