AP Microeconomics

Category - Microeconomics

Which of the following terms refers to the ability of one single business to influence price?
  1. Oligopoly
  2. Monopolistic competition
  3. Market power
  4. Game theory
Explanation
Answer - C - Market power is the ability of one single business to influence price.

Key Takeaway: Market power is the ability of one single business to have a major affect upon the market price of an available good or service. In a perfectly competitive market, the involved businesses have little-to-no market power. Within an oligopoly, market power for a particular business is quite substantial.
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