What are the only firms that do not have market power?
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

Firms in perfectly competitive markets are those that do not have market power. In a perfectly competitive market, there are many small firms that sell identical products, have no control over the price, and are free to enter or exit the market. This ensures that no single firm has the ability to influence the market price or earn higher profits than their competitors. Therefore, they cannot exercise market power.

What Are the Only Firms That Do Not Have Market