I have read papers where markup has been taken to measure market power. However, if markup data is unavailable, is it okay to continue with profit margin, as when a company has market power, it can control its profit margin?
Profit margin can be an indicator of market power, but it's not a comprehensive measure. While high profit margins may suggest strong pricing power and market control, other factors like competitive dynamics, market share, and pricing strategies should also be considered for a complete assessment of market power.