Question 19 Explain the concept of market power. Why does a monopolist have market power while...

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Answer 1

Answer #1

Market power refers to the the firm ability to control and decide the price in the market .

If there is more market power it means the price decision is in the hands of the supplier.

When we talk about a Monopoly and perfect competition then a Monopoly has more market power because of the only single seller in the market .

In the perfect competitive market, price is decided by the market forces that is demand and supply in the market and not by the buyers and sellers .

So market power is low as compared to monopoly

Answer 2

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