Market power refers to a company’s capacity to increase prices and decrease production without significant customer loss. This implies that they can charge more than the production cost and still generate profits. When a company possesses substantial market power, it can potentially dominate the market and hinder competition from other companies. This can be detrimental to consumers as it may result in higher prices for products or services compared to a more competitive market.
Market power refers to the capacity of a company or a group of companies to dominate the market by reducing production and increasing prices above the competitive level for an extended period. This enables them to generate profits. In the context of antitrust law, possessing a significant amount of market power may be considered as having a monopoly. For instance, if a company holds a monopoly on a specific product, it possesses complete market power and can set prices without concern for losing customers to competitors. Another example is when a group of companies collude to manipulate prices, granting them market power within the industry. Market power is detrimental to consumers as it restricts their choices and compels them to pay higher prices. Additionally, it hampers competition and innovation within the market.
Market power refers to the ability of a company or group of companies to control the price and supply of goods or services in a particular market.
Market power is determined by factors such as the number of competitors in a market, the barriers to entry, and the ability of companies to influence prices.
No, having market power is not illegal. However, using that power to engage in anti-competitive behavior, such as price-fixing or monopolization, is illegal.
A monopoly is a situation where one company or group of companies has complete control over a particular market, with no competition.
No, having a monopoly is not illegal. However, using that monopoly power to engage in anti-competitive behavior is illegal.
Price-fixing is an illegal practice where companies agree to set prices at a certain level, rather than allowing market forces to determine prices.
Predatory pricing is an illegal practice where a company sets prices below cost in order to drive competitors out of business.
A cartel is a group of companies that agree to work together to control prices and supply in a particular market.
Antitrust laws are designed to prevent companies from engaging in anti-competitive behavior, such as price-fixing or monopolization, in order to protect consumers and promote competition.
Penalties for violating antitrust laws can include fines, injunctions, and even criminal charges for individuals involved in the illegal behavior.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/market-power/
- Modern Language Association (MLA):Market Power. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/market-power/.
- Chicago Manual of Style (CMS):Market Power. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/market-power/ (accessed: May 09 2024).
- American Psychological Association (APA):Market Power. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/market-power/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts