What is one drawback of pure competition compared to monopolies?
Understand the Problem
The question is asking to identify one disadvantage or limitation of pure competition in contrast to monopolies, focusing on economic structures and market dynamics.
Answer
It spreads resources between many firms, reducing economic efficiency.
The final answer is that pure competition spreads resources between many different firms, reducing economic efficiency compared to monopolies.
Answer for screen readers
The final answer is that pure competition spreads resources between many different firms, reducing economic efficiency compared to monopolies.
More Information
One main drawback is that pure competition can reduce economic efficiency because resources are spread thinly across many different firms, unlike monopolies which, through economies of scale, can lower costs.
Tips
A common mistake is failing to consider economic efficiency and only focusing on consumer choice and pricing.
Sources
- The web page with info on - Example Source - chegg.com
- Brainly - Economic efficiency drawback - brainly.com
