Which of the following occurs if firms are able to restrict output and raise price?
A)resources are misallocated
B)wealth is shifted from consumers to government
C)wealth is shifted from producers to consumers
D)P = MC
E)P = minimum LRAC

Question

Quizplus · Accepted Answer

When firms restrict output and raise prices, resources are misallocated because the price does not reflect the true cost of production, leading to inefficiencies in the market.

Which of the Following Occurs If Firms Are Able to Restrict