market power


Market Power

The ability of a company to be able to heavily influence the price charged for its product because no other companies have the same product or a similar product of the same quality. That is, a company with a great deal of market power is essentially able to charge whatever it wants so long as it does not run afoul of antitrust laws. See also: Monopoly, Price maker.

market power

or

monopoly power

the ability of a firm (or group of firms) to dictate market prices and other terms and conditions of supply. Market power derives essentially from the possession of a dominant market share (see MONOPOLY) or from COLLUSION between the leading suppliers. Where firms possess market power there exists a danger that such power might be abused; for example, the charging of monopolistic prices to the detriment of consumers or selective price cuts to drive out smaller competitors. See COMPETITION POLICY, MARKET STRUCTURE, MARKET CONDUCT, MARKET PERFORMANCE, DOMINANT FIRM.

market power

the ability of a FIRM to administer (within limits) the supply price and terms of sale of its product without immediate competitive encroachment. Market power brings with it the particular danger of exploitation of the consumer by the supplier. The exercise of market power is typically associated with an OLIGOPOLY or a MONOPOLY. See alsoADMINISTERED PRICE, COMPETITION POLICY, SELLER CONCENTRATION, CONDITION OF ENTRY.