MARKET POWER Meaning and
Definition
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Market power refers to the ability of a firm or a group of firms to influence the price, output, or competitive behavior in a specific market. It measures the extent to which a company can depart from the competitive ideal and exert control over the market conditions. Market power is typically achieved by a firm through factors such as economies of scale, product differentiation, patents, strategic barriers to entry, or control over essential resources.
A firm with market power has the advantage of being able to set prices higher than those determined by a perfectly competitive market, leading to an increase in profits. This ability arises from the firm's ability to control the supply of goods or services in the market or manipulate demand through advertising, innovation, or brand recognition. In addition, firms with market power can influence other market participants, suppliers, and customers, shaping the conditions for competition.
The presence of market power can impact consumers, as it may lead to higher prices, reduced product or service availability, and limited consumer choice. Due to the potential negative effects of market power on competition and consumer welfare, governments and regulatory authorities monitor and intervene in markets where market power is concentrated to prevent abuse of dominance, protect consumers, and ensure fair competition.
Common Misspellings for MARKET POWER
- narket power
- karket power
- jarket power
- mzrket power
- msrket power
- mwrket power
- mqrket power
- maeket power
- madket power
- mafket power
- matket power
- ma5ket power
- ma4ket power
- marjet power
- marmet power
- marlet power
- maroet power
- mariet power
- markwt power
- markst power
Etymology of MARKET POWER
The word "market power" does not have a specific etymology because it is a combination of two separate words: "market" and "power".
"Market" comes from the Latin word "mercatus", which means "trade" or "a gathering for buying and selling". This Latin word has roots in the word "merx" meaning "merchandise or commodity".
"Power" comes from the Old French word "poeir" which means "to be able". It has Latin roots in the word "potestas", meaning "ability, power, or authority".
When combined, "market power" refers to the ability or control that a firm or entity has in a specific market.
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