Suppose that Peanuts 'R' Us acquires ownership of all peanut butter processing plants in the country.This will most likely lead to the market failure of:
A) external costs.
B) deregulation.
C) imperfect information.
D) imperfect competition.

Question

Quizplus · Accepted Answer

This scenario portrays a monopolistic market structure where Peanuts 'R' Us would be the sole supplier of peanut butter in the market, leading to imperfect competition. The lack of competition can lead to a lack of innovation, higher prices, and potentially lower quality products. Therefore, the acquisition can result in market failure due to the absence of a competitive market.

Suppose That Peanuts 'R' Us Acquires Ownership of All Peanut