Suppose the perfectly competitive equilibrium occurs such that too many units of the good are produced. This is an example of

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Quizplus · Accepted Answer

This is an example of market failure because the perfectly competitive equilibrium results in a situation where there is an excess supply of the good. This means that resources are being allocated inefficiently, and there is a welfare loss to both producers and consumers. In a perfectly competitive market, this should not occur, but it does in this case, indicating a market failure.

Suppose the Perfectly Competitive Equilibrium Occurs Such That Too Many