Market power can cause market failure if it results in a misallocation of resources.
Answer the following statement true (T) or false (F)
True
Market power contributes to market failure when it leads to resource misallocation (restricted output) or greater inequity (monopoly profits or higher prices).
You might also like to view...
The opportunity cost of any decision is the forgone value of the next best alternative that is not chosen.
Answer the following statement true (T) or false (F)
Currently (2009) farm employment is about:
A. 15.8 percent of total employment. B. 9.4 percent of total employment. C. 1.1 percent of total employment. D. 1.8 percent of total employment.
What are the effects on a market when there is entry?
What will be an ideal response?
Which of the following is an implicit cost of production?
A) interest paid on a loan to a bank B) wages paid to labor plus the cost of carrying benefits for workers C) the utility bill paid to water, electricity, and natural gas companies D) rent that could have been earned on a building owned and used by the firm