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Why is it hard for a firm to maintain market power over a Long Run?
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Purpose
To assess your ability to:
Analyze the relationships between revenues, costs, and profits in a variety of market settings.
Discuss government regulations of less than competitive market structures and firms.
Discuss economists approach to evaluating potential mergers and acquisitions.
Evaluate the extent of a companys market power.
Action Items
Write a one to two page paper, addressing the following:
Describe in your own words the concept of market power.
Provide an example of a firm exercising its market power.Referring to your example above, answer the following questions:
What are the sources of the firms market power?
Can they be sustained over a short run / long run?
Answer the question below in your conclusion:
Why is it hard for a firm to maintain market power over a Long Run?
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