Use the following to answer question(s): Correcting for Market Failure: Imperfect Competition

-(Exhibit: Correcting for Market Failure: Imperfect Competition) Before any attempt to intervene to reduce the inefficiency associated with the imperfectly competitive market shown in this exhibit, the equilibrium price is _______ and the equilibrium output is ________ .
A) Pᵥ; W
B) Pᵤ; R
C) Pᵤ; W
D) Pᵥ; R

Question

Use the following to answer question(s): Correcting for Market Failure: Imperfect Competition
 
-(Exhibit: Correcting for Market Failure: Imperfect Competition) Before any attempt to intervene to reduce the inefficiency associated with the imperfectly competitive market shown in this exhibit, the equilibrium price is _______ and the equilibrium output is ________ .
A) Pᵥ; W 
B) Pᵤ; R 
C) Pᵤ; W 
D) Pᵥ; R

Quizplus · Accepted Answer

In an imperfectly competitive market, the equilibrium without intervention typically occurs where marginal cost (MC) intersects the demand curve, which is usually at a higher price and lower quantity than in a perfectly competitive market. Therefore, the correct answer is Pᵤ for the equilibrium price and R for the equilibrium output, as these would reflect the typical outcomes in such a market scenario.

Use the Following to Answer Question(s): Correcting for Market Failure