If a seller is able to control the market price, the seller has market power and the market outcome will be inefficient.

Question

Quizplus · Accepted Answer

When a seller has control over the market price, they can set it higher than the market equilibrium price, resulting in a decrease in consumer surplus and an increase in producer surplus. This leads to an inefficient market outcome, as not all mutually beneficial transactions are taking place.

If a Seller Is Able to Control the Market Price