Market Power
The ability of a business with a large market share to influence prices, terms of trade, or competitive conditions in it...
Formula
Market Share = (Firm's Sales / Total Market Sales) × 100
Real World
Google controls over 90% of the global search engine market, giving it the power to charge premium advertising rates and set terms that small businesses must accept to reach customers online.
Exam Focus
When asked to 'evaluate' market power, always weigh benefits to the firm against consumer harm and regulatory intervention.
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