In a market that lacks sufficient competition,
A) output will generally be less than the output that is ideal from the standpoint of economic efficiency.
B) output will generally be greater than the output that is ideal from the standpoint of economic efficiency.
C) price will generally be less than the price that would result if the market was competitive.
D) profit rates will generally be so low that government subsidies will be necessary to ensure that the firms remain in business.

Question

Quizplus · Accepted Answer

In a market with insufficient competition, firms have market power, leading to reduced output and higher prices compared to a competitive market, resulting in less than ideal economic efficiency.

In a Market That Lacks Sufficient Competition