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August 12, 2022

Why is it hard for a firm to maintain market power over a Long Run?

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 company’s market power.

Action Items

Write a one to two page paper, addressing the following:

1. Describe in your own words the concept of market power.
2. 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 firm’s market power?
  - Can they be sustained over a short run / long run?
3. 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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