Market power can cause market failure if it results in a misallocation of resources.

Name: Market power can cause market failure if it results in a misallocation of resources.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Market power can allow a firm to charge higher prices and reduce output, leading to a misallocation of resources where social welfare is not maximized. This can result in market failure, as resources are not allocated efficiently.

Market Power Can Cause Market Failure If It Results in a Misallocation