Market power: a

Market power: (e) all of the above.

a. is the capability to increase the price without losing all sales. Because the firm doesn't face any strong competition, raising the price won't result in them losing all of their customers.

b. exists whenever the firm faces a downward-sloping demand curve. When a firm has market power, it faces a downward-sloping demand curve, which allows them to set the price for their product.

c. is greater the less elastic is demand. The less elastic the demand, the more the firm has the ability to raise their prices since they won't see a significant decline in the demand for their product.

d. is smaller the more positive is the cross-price elasticity of demand. Higher cross-price elasticity of demand will reduce market power because consumers will more easily switch to alternative products.