Question

The competitive market model assumes that consumers have free entry and exit into markets. In practice, firms try to gain market share by limiting a consumer’s freedom to switch to another firm. Describe a specific example of a real product and company where a firm practices market power in the US.

Answer 1

Apple's iPhone is an example of a real product and company where a firm practices market power in the US.

Step-by-step explanation:

In the U.S., an example of a real product and company where a firm practices market power is Apple's iPhone. Apple has a significant market share in the smartphone industry and limits consumer's freedom to switch to another firm by creating a closed ecosystem. This means that iPhone users can only download apps from the Apple App Store and are limited in customizing their devices compared to other smartphone brands.