When firms have the ability to restrict output,raise prices,stifle competition,and inhibit innovation,the market failure involved is

Question

Quizplus · Accepted Answer

The given scenario describes the market power of firms, where they have the ability to influence the market to their advantage by restricting output, raising prices, inhibiting innovation, and stifle competition. Such market power leads to market failure as it results in a lack of allocative efficiency, and resources are not being utilized in the best way possible. Therefore, option C is the correct choice.

When Firms Have the Ability to Restrict Output,raise Prices,stifle Competition,and