Imperfect competition
A) means there is no competition in the market.
B) results in less efficient market outcomes.
C) should always be regulated by the government
D) is a major cause of externalities in the market.

Question

Quizplus · Accepted Answer

Imperfect competition, such as monopolistic competition or oligopoly, often leads to less efficient market outcomes compared to perfect competition. This is because firms in imperfectly competitive markets have some power to set prices above marginal costs, leading to potential deadweight losses and a reduction in consumer surplus.

Imperfect Competition