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Analysis of Horizontal Market Power under the Federal Power Act  Form

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in this lesson we'll learn about market power barriers to entry and natural monopolies and how they enable super competitive prices imperfect competition exists when one or more actors exercise market power market power is the ability to raise price above marginal cost over the long term thus allowing the seller to earn an economic profit it can be most easily exercised by a monopoly which is the only seller in a market it also can be exercised when there's an oligopoly only a few sellers in the market one reason an actor might have market power is that it enjoys economies of scale that competitors lack economies of scale would allow that actor to produce at a lower marginal cost than its competitors potential new competitors also might face barriers to entry that prevent them from entering the market and bidding prices down from super competitive levels you

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