Market Structure and Market Power End of Chapter Question

a.Market power is

the amount of money a firm makes after covering the cost of production.

when there is only one seller in the market.

the ability of a firm to discriminate against customers based on age, sex, or ethnicity.

the extent to which a firm can charge a higher price without losing many customers.

b.Which of the following are factors that can create market power for a firm? Select all that apply.

Having fewer competitors in the market.

Having a homogenous product.

Being able to differentiate one's product.

c.In a perfectly competitive market, firmsdo nothave market power because

firms are selling an identical product, so it is impossible to make the product unique.

there are many competitors in the market, and market entry is easy.

any attempt to raise prices will cause customers to buy the product from another seller.

all of these are reasons why perfectly competitive firms do not have market power.