Market power is ?
Correct answer: B. a firm's ability to raise price without losing all demand for its product
- A. a firm's ability to monopolies a market completely.
- B. a firm's ability to raise price without losing all demand for its product
- C. a firm's ability to sell any amount of output it desires at the market-determined price.
- D. a firm's ability to charge any price it likes
Explanation
Market power means the ability to raise price without losing all buyers, because the firm faces a downward-sloping demand curve. It does not mean the firm can charge any price or sell unlimited output at the market price.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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