Definition For Monopoly Power

Monopoly power is defined as the power to control prices or exclude competition st.

Definition for monopoly power. Monopoly power is often contrasted with a price taker. The relationship between monopoly power and market structure. Monopoly power also called market power refers to a firm s ability to charge a price higher than its marginal cost. Exclusive control by one group of the means of producing or selling a commodity or service.

When a company is a price taker it has no control over their products selling price let alone influence the market price. Bard inc 2009 u s. In this lesson we will learn the definition of monopoly power. Degree of price setting power held by a supplier on the basis of its market share.

Monopoly power is synonymous with market power and is often used interchangeably in some literature. The answer lies in the nature of the demand curve. Monopoly power typically exists where the there is low elasticity of demand and significant barriers to entry. Why is it that a firm in perfect competition is a price taker while a monopoly can set any price it deems fit.