Each of the following factors might interfere with the efficiency of perfect competition except:
A)increasing returns to scale.
B)imperfect price information.
C)externalities.
D)diminishing returns to scale.

Question

Quizplus · Accepted Answer

Diminishing returns to scale do not interfere with the efficiency of perfect competition. Instead, they are a characteristic of many competitive markets where, beyond a certain point, adding more of one input (like labor or capital) leads to smaller increases in output. This contrasts with increasing returns to scale, imperfect price information, and externalities, all of which can disrupt the efficient functioning of a perfectly competitive market.

Each of the Following Factors Might Interfere with the Efficiency