8 Market power can arise as a result of insufficient actual or potential competition to ensure that the market continues to operate efficiently.
9 High start up costs can deter entry by competitors in the first place, and therefore create market power. This situation may be exacerbated through organisations acting strategically to protect their position in the market. Examples of this are when an organisation invests in any excess capacity available in the market, or engages in a practice known as 'predatory pricing' where prices are set low (e.g. below the marginal cost of production) to drive out competitors and then raised once they have left.