A common strategy for a seller to increase its market power is to:Question 7Answera.increase output.b.differentiate its product.c.raise price.d.reduce price.

To address the question of a common strategy for a seller to increase its market power, let's analyze the options provided:

1. Increase output: While increasing output can lead to economies of scale, it doesn't necessarily enhance market power. In a competitive market, increased output may also lead to lower prices.

2. Differentiate its product: This strategy is focused on creating a perceived difference between the seller's product and those of competitors. Product differentiation can lead to brand loyalty, allowing sellers to exert greater control over pricing and potentially increase market power.

3. Raise price: Raising prices may temporarily increase revenue, but in a competitive environment, it can lead to a loss of customers to competitors unless justified by increased value, which doesn't inherently increase market power.

4. Reduce price: Reducing prices can attract more customers, but it may not truly enhance market power and could lead to lower profit margins.

Conclusion:

Among these options, b. differentiate its product is the most effective strategy for a seller to increase its market power by establishing a unique position in the market.