The market definition controls whether there is market power.

Question

Quizplus · Accepted Answer

Market power depends on the market definition, as it determines the boundaries within which competition takes place. If the market is narrowly defined, a firm may have significant market power, while a broader market definition may reveal the presence of strong competitors. Therefore, the market definition is a crucial factor in identifying market power and assessing the level of competition in a market.

The Market Definition Controls Whether There Is Market Power