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What does market structure mainly explain about firms in a market?

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Question

What does market structure mainly explain about firms in a market?

Options

  • Their total production cost

  • Their power to influence product price

  • Their advertising budget

  • Their legal form of ownership

MCQ
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Solution

Their power to influence product price

Explanation:

Market structure describes how a market is organised and indicates how much control each firm has over the price of its product, from no power in perfect competition to high power in monopoly.

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