Markets can fail to achieve efficiency when
A)there are prices consumers do not think are fair.
B)there are wages workers do not think are fair.
C)trade puts people out of work.
D)there are markets with imperfect competition.

Question

Quizplus · Accepted Answer

Markets with imperfect competition such as monopolies or oligopolies can lead to higher prices and lower output than would be achieved under perfect competition, resulting in a loss of economic efficiency. Choices A and B are related to issues of equity rather than efficiency, while choice C is a controversial and contested claim about the impact of trade on employment.

Markets Can Fail to Achieve Efficiency When