What is Market Power
In economics, market power refers to the ability of a firm to influence the price at which it sells a product or service by manipulating either the supply or demand of the product or service to increase economic profit. In other words, market power occurs if a firm does not face a perfectly elastic demand curve and can set its price § above marginal cost (MC) without losing revenue. This indicates that the magnitude of market power is associated with the gap between P and MC at a firm's profit maximising level of output. The size of the gap, which encapsulates the firm's level of market dominance, is determined by the residual demand curve's form. A steeper reverse demand indicates higher earnings and more dominance in the market. Such propensities contradict perfectly competitive markets, where market participants have no market power, P = MC and firms earn zero economic profit. Market participants in perfectly competitive markets are consequently referred to as 'price takers', whereas market participants that exhibit market power are referred to as 'price makers' or 'price setters'.
How you will benefit
(I) Insights, and validations about the following topics:
Chapter 1: Market power
Chapter 2: Duopoly
Chapter 3: Microeconomics
Chapter 4: Monopoly
Chapter 5: Monopolistic competition
Chapter 6: Oligopoly
Chapter 7: Perfect competition
Chapter 8: Imperfect competition
Chapter 9: Herfindahl-Hirschman index
Chapter 10: Anti-competitive practices
Chapter 11: Barriers to entry
Chapter 12: Monopoly profit
Chapter 13: Lerner index
Chapter 14: Market structure
Chapter 15: Market concentration
Chapter 16: Competition (economics)
Chapter 17: Edward Chamberlin
Chapter 18: Dominance (economics)
Chapter 19: Bilateral monopoly
Chapter 20: Profit (economics)
Chapter 21: Monopoly price
(II) Answering the public top questions about market power.
(III) Real world examples for the usage of market power in many fields.
Who this book is for
Professionals, undergraduate and graduate students, enthusiasts, hobbyists, and those who want to go beyond basic knowledge or information for any kind of Market Power.
