Which of the following is a major source of inefficiency?
A) market power
B) perfect competition
C) price taking
D) all of the above

Question

Quizplus · Accepted Answer

Market power, which allows companies to set prices above marginal costs, can lead to inefficiencies in the market by reducing consumer surplus and potentially leading to underproduction or overpricing of goods and services. Perfect competition and price taking, on the other hand, are characteristics of efficient markets.

Which of the Following Is a Major Source of Inefficiency