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In economics, you will definitely get to study the topic named as Market Power. It is a highly interesting as well as useful topic, but at the same time, it covers so many aspects that can be a little confusing to understand on one’s own. So if you are facing any difficulty in comprehending this topic, then you must grab market power homework help.

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What is exactly the meaning of market power?

Market power is actually the power with a business entity by which it can manipulate the prices of goods and services by having a control over the demand or supply or both the aspects. The firm having market power will always try to raise the prices of goods and services so that its profits can be increased. In the case of perfect competition, none of the market players are having market power to manipulate the prices for their own profitability.

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What are the noticeable features of a firm having market power?

In a case where there is a single firm in the market that is having the entire market power then it can raise the prices of goods and services for increasing the profitability and will still not lose any of its customers. That is why those business entities that are having market power are known as price setters, or you can say price makers.

When we talk about depicting market power through diagrammatical explanation, then you can say that there is a significant level of market power with a business entity when the prices are in excess of the marginal costs and the long run average cost as well. Here the firm is making a substantial amount of profits. Thus a firm having market power can influence the total quantity or price level as per its own wish.

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The effect of market power

Market power is a profitable situation for the business entity but not for the consumers. It is so because substantially high prices will be charged from the consumers and they may have access to restricted quantities. That’s why the government and regulatory authorities intervene with antitrust regulations so that market power can be curbed and consumer welfare can be ensured.

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