What is meant by “market power”? What does market power depend on? Briefly explain why a business in a perfectly competitive market does not have market power.

The market power of a firm is its:Question 20Answera.ability to raise its price without losing many of its customers to competing businesses.b.number of years in business.c.ranking based on units sold compared to other firms selling the same product.d.ability to charge a price equal to marginal cost.

The type of market in which businesses possess the least market power is a(n):Multiple Choicemonopolistically competitive market, as each business differentiates its productscompetitive monopoly, because it combines both competition and monopolymonopoly, as it has no competitorsoligopoly, as each business's size is large relative to the industryperfectly competitive market, as each business is a price-taker

Which of the following can give a firm market power? aHaving access to common information bProducing a standardized or homogeneous product cLacking barriers to entry or exit dHaving economies of scale in production over the range of market output

When we hear sayings like, "The market is most efficient when left alone" and that the government should not interfere but rather let the "invisible hand" let it run, this "market" they are referring to, wittingly or unwittingly, is a specific form of market: (perfectly) competitive market.Markets, Efficiency, and Price SignalsLinks to an external site.Can you tell the difference between a grain of rice from one farm from another grain from a different farm? Chances are you can't. And it's markets like this -with identical goods that leave producers to be price takers (rather than having some/much control of their price and quantity combination), and also where entry into and exit from the market are relatively easy, that the economy is supposed to work at its best. This week, we examine how a producer in such a market structure maximizes its profit and why this type of market structure is deemed to be the most efficient and optimal.Something to think about that would make the chapter more enriching:Could you think of an example in your personal life that you would use the same thought process as profit maximization's MC = MR?

Monopolistically competitive firmsGroup of answer choiceshave market power because they can set price above marginal cost.have no market power because they earn zero economic profit.have no market power because of free entry.have no market power because price equals marginal cost.