Analysis of the structure of the market providesinformation about the nature and extent of competition which the firms have to face. Thishelps in determining the degree of market power (ability to determine prices) which the firmcommands and the strategies to be followed in market management under the givencompetitive conditions such as, product design and marketing. Price theory explains howprices are determined under different kinds of market conditions and assists the firm inframing suitable price policies.

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.

Understanding the price strategies a competitor uses will assist a business to be financially viable by:

Market structure adeals with how much competition exist in each market bis the measurement of how many companies exist in a given market structure cdeals with how much money a company can make in a given market d

The market value of the firm is the result of__________.

A firm’s pricing objectives must be compatible with:Select one:a.its competitors’ pricing objectivesb.product qualityc.its marketing objectivesd.the laws of demand in the industry