Power is typically inferred from a dominant market share protected by entry barriers, though direct evidence of price control may substitute. Shares above seventy percent generally support the inference while shares below fifty percent rarely do.
Entry barriers are essential to the inference.
Alternative Names:
Market Power (Monopoly)|Monopoly Market Power
Why it Matters?
Entry barriers are what convert share into power, since a high share in a market with low barriers does not confer the ability to raise prices profitably, and establishing that entry is feasible defeats the inference regardless of current share. Market definition drives share calculation entirely, which is why the market definition contest determines the monopoly power outcome. Direct evidence of sustained above-competitive pricing bypasses the share analysis.
Frequently Confused with
Related terms
Frequently asked questions
What converts share into power?
Can power be shown without share evidence?
