In contrast to a monopoly which misallocates resources by restricting output and producing too little,government bureaus misallocate resources by _____.

Question

Quizplus · Accepted Answer

Government bureaus are often criticized for overproducing or producing more than what is necessary for the given demand. This is because government bureaus do not face the same profit incentives as private firms and are not subject to the same market forces. As a result, government bureaus may continue to produce goods and services even if there is little or no demand for them, leading to a misallocation of resources.

In Contrast to a Monopoly Which Misallocates Resources by Restricting