Unit 2.11 · Market Failure: Market Power
Degrees of Market Power
AO3HL
Syllabus Requirement
Defines market power across structures. Perfect competition: no market power. Imperfect markets: firms are price makers.
Assessment Objectives
AO3Synthesis and Evaluation
Summary
This topic discusses market power, which is the ability of firms to influence the price of goods or services through supply and demand manipulation. Understanding the degrees of market power is essential for analyzing different market structures, particularly how firms operate in perfect competition where they have no market power.