Discussion
'A firm having market power substantial enough to act independent of the competitive forces that prevail in the relevant market.' What does this statement refer to ?
Answer: B
The statement describes a dominant position.
The Explanation to section 4 of the Competition Act, 2002 defines a dominant position as a position of strength enjoyed by an enterprise in the relevant market in India which enables it to operate independently of the competitive forces prevailing in that market, or to affect its competitors, consumers or the market in its favour. Abuse of such a position is prohibited.
A cartel is an agreement among competitors, market equilibrium is the balance of supply and demand, and 'predominant nature of activity' is not this concept.
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