Which of the following best defines market power?
Choose 1 answer:
(A) the ability to make a profit in the short run
(B) a firm's ability to control the quantity they produce
(C) the ability to advertise
(D) the ability to control the price of a good
(E) a firm's decision to enter or exit a market

Question

Accepted Answer

∻Solution∻ ‖ a ⋮ Market Power Definition: Market power refers to a firm's ability to influence the price of a good or service in the market. ‖ ‖ b ⋮ Correct Option Identification: Among the given options, the ability to control the price of a good is the most accurate definition of market power. ‖ ∻Answer∻ ⚹ Option D: the ability to control the price of a good ⚹ ∻Key Concept∻ ⚹ Market Power ⚹ ∻Explanation∻ ⚹ Market power is best defined as a firm's ability to control the price of a good, which reflects its influence over the market conditions. ⚹◊What impact does market power have on the overall economy in terms of competition and pricing?⍭ Generate me a similar question◊

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