A firm has market power if it can
A)maximize profits.
B)minimize costs.
C)influence the market price of the good it sells.
D)hire as many workers as it needs at the prevailing wage rate.

Question

Quizplus · Accepted Answer

Market power refers to the ability of a firm to influence the market price of the good or service it sells. A firm with market power can charge a higher price than a perfectly competitive market, which allows it to earn higher profits. Therefore, the correct answer is C.

A Firm Has Market Power If It Can