Market Power and Competition Policy

Market power is a firm's ability to influence the price of its own product rather than simply accepting a price set entirely by the overall market, a power that generally increases as a market moves away from perfect competition and toward monopoly. Governments can respond to excessive market power through competition policy, sometimes called antitrust policy, which can include blocking mergers that would reduce competition too much, breaking up an existing monopoly, or fining firms for actions, like price-fixing agreements between competitors, that illegally reduce competition.

This explanation is AI-generated and can occasionally be wrong. 🚩 Report