When competitive forces in an industry are weak,
A) the absence of competition generally leads to overproduction.
B) prices may exceed the amount consumers are willing to pay.
C) the operational efficiency of private firms will be enhanced.
D) higher prices and less than optimal production may result.

Question

Quizplus · Accepted Answer

When competitive forces are weak, firms may not have the incentive to lower prices or increase production, leading to higher prices and less than optimal production levels.

When Competitive Forces in an Industry Are Weak