The only firms that do not have market power are
A)firms in industries with low barriers to entry.
B)firms that do not advertise their products.
C)firms in perfectly competitive markets.
D)firms that sell identical products.

Question

Quizplus · Accepted Answer

In perfectly competitive markets, no single firm has market power as they have to sell their goods or services at the prevailing market price. There are many buyers and sellers in a perfect competition, and therefore, no one has the power to influence the market price. Options A, B, and D may have some degree of market power, as they may face competition from other firms with similar products or advertising campaigns, but it still would not be as significant as in a monopolistic or oligopolistic market.

The Only Firms That Do Not Have Market Power Are