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Which one of the following best describes the term market power? Select one answer - Edexcel - GCSE Business - Question 3 - 2017 - Paper 1
Question 3
Which one of the following best describes the term market power? Select one answer. A. The combination of product, price, promotion and place B. The influence a b... show full transcript
Worked Solution & Example Answer:Which one of the following best describes the term market power? Select one answer - Edexcel - GCSE Business - Question 3 - 2017 - Paper 1
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Step 2
Explain the concept of market power
Answer
Market power is the ability of a firm to raise prices above the competitive level without losing all its customers. This can occur through brand loyalty, less availability of substitutes, and overall customer satisfaction.
For Five Guys, the brand's unique offering and quality can lead to higher market power. Because customers may perceive its burgers as superior and essential, this loyalty allows it to maintain higher prices, particularly in competitive markets.