The market comprises products reasonably interchangeable by consumers and the geographic area of effective competition. The hypothetical monopolist test asks whether a small but significant price increase would be profitable.
Definition determines share and power calculations.
Alternative Names:
Market Definition|Relevant Market
Why it Matters?
Market definition determines the outcome in most antitrust cases, since a broadly defined market produces low shares that defeat power allegations while a narrow one supports them, which makes the definition contest more consequential than the conduct analysis. Plaintiffs define narrowly around the defendant's offering, and demonstrating substitution to adjacent products through switching data and consumer surveys is the response.
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Related terms
Frequently asked questions
Why is market definition decisive?
What rebuts a narrow definition?
