The efficiency problem that results from market power is that the market:
A)has side-effects.
B)has too many producers.
C)overproduces.
D)underproduces.

Question

Quizplus · Accepted Answer

Market power leads to underproduction because firms with market power have the ability to restrict output and raise prices without losing market share. This leads to a reduction in output and an increase in price, resulting in a deadweight loss or inefficiency in the market.

The Efficiency Problem That Results from Market Power Is That