Market power leads to market failure when it results in

Name: Market power leads to market failure when it results in
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Market power allows firms to restrict output and raise prices, leading to reduced market output. This results in market failure as the reduction in output means that the market is not producing goods and services in the most efficient way possible. Lower market prices and normal economic profits are not indicative of market failure.

Market Power Leads to Market Failure When It Results in