One of the drawbacks of free markets is the fact that competition in such markets undermines the ability of price to adjust to its equilibrium value in the long run.
Level of Learning 1: Knowledge of key terms

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This statement is false. In free markets, competition actually helps to drive the price towards its equilibrium value in the long run. As firms compete with each other, they are motivated to produce and sell goods at a price that is closer to the actual cost of production. This process of competition and adjustment helps to ensure that prices accurately reflect the underlying supply and demand forces in the market.

One of the Drawbacks of Free Markets Is the Fact