When companies in a market-directed economy try to find "little monopolies" for themselves,
A) success is likely to attract more competitors-and squeezing of the innovators' profits.
B) they will fail.
C) this reduces innovation, new investment, and economic growth.
D) the allocation of resources will be the same as in a purely competitive economy.
E) this forces consumers to buy new-possibly more expensive-products that they do not want.

Question

Quizplus · Accepted Answer

Finding small monopolies in a market-directed economy can lead to temporary success, but it is likely to attract more competitors which causes a narrowing of the innovators' profits. This in turn reduces innovation, new investment, and ultimately economic growth.

When Companies in a Market-Directed Economy Try to Find "Little