A firm is said to have market power if:

Question

Quizplus · Accepted Answer

A firm with market power is able to affect market price, meaning it has some control over the supply of goods or services in the market. This is often due to factors such as exclusive access to key resources, brand recognition, or technological advantages. Taking market price as given (A) is a characteristic of a perfectly competitive market where no single firm has market power. Similarly, causing other firms to enter the industry (C) would suggest a lack of market power, as new competition would reduce a firm's ability to influence prices. Finally, a firm not earning a loss (D) is simply a condition for its survival and does not necessarily indicate market power.

A Firm Is Said to Have Market Power If