A common argument against prices determined in noncompetitive markets is that such prices

Question

Quizplus · Accepted Answer

Prices in noncompetitive markets may be set by a small group of producers who may not have the same incentives to take into account consumer desires as they would in a competitive market where they are forced to respond to consumer preferences.

Answer: B 
 Prices in noncompetitive markets are not established by supply and demand, so they may not effectively allocate resources. In some cases, prices may be set higher than would be the case in a competitive market, resulting in shortages, but in other cases prices may be set below competitive market prices, resulting in surpluses.

Answer: E 
 Noncompetitive markets often lead to the concentration of market power in the hands of a few producers or buyers, giving them the ability to influence prices and effectively exploit their position to the disadvantage of others who lack market power. Therefore, prices determined in noncompetitive markets primarily promote the interest of those with market power.

A Common Argument Against Prices Determined in Noncompetitive Markets Is