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.

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.

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

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.

A common strategy for a seller to increase its market power is to:Question 7Answera.increase output.b.differentiate its product.c.raise price.d.reduce price.

The market value of the firm is the result of__________.