Sales, they have to lower their price. The stronger this relationship, the greater the market power

Where market power exists, the producer has such influence on the market that the amount he decides

To produce affects the market price, and so price is not equivalent to marginal revenue. Market

Power is related to the availability of substitute items. Those items which are highly differentiated

From those of competitors will give more market power to the producer than those which are standard.

Commentary and Notes to Text 15.7.1.4

Market power — рыночные силы

The going price — существующая (действующая) цена

Demand curve — кривая спроса

15.7.1.5. Read the text “Factors Affecting the Market Situation Adversely” and enumerate these

Factors in Russian.

(!) Factors Affecting the Market Situation Adversely

Within the context of analyzing the market situation we shall pay special attention to market failures.

Market failure is an outcome deriving from the self-interested behaviour of individuals in the

Context of free trade, in which economic efficiency does not result. Market failures provide a ubiquitous

Argument for intervention of some form or other. But they have two main sources. First, they

Derive from the fact that many transactions which would need to occur for the sake of economic

Efficiency simply do not occur. This may be on account of transaction costs. Or, there may be a