Which of the following is true of an imperfect market structure? (a) Participants in the market have little or no control over outcome in the market. (b) Consumer surplus is maximi... Which of the following is true of an imperfect market structure? (a) Participants in the market have little or no control over outcome in the market. (b) Consumer surplus is maximized. (c) The maximization of producer surplus may lead to a loss of net benefit for society. (d) Imperfect market structures include monopolies but not cartels.
Understand the Problem
The question is asking about characteristics of imperfect market structures and provides multiple-choice options. We need to analyze which assertion correctly describes features of such structures.
Answer
The maximization of producer surplus may lead to a loss of net benefit for society.
The final answer is the maximization of producer surplus may lead to a loss of net benefit for society.
Answer for screen readers
The final answer is the maximization of producer surplus may lead to a loss of net benefit for society.
More Information
In imperfect market structures, producers may have market power which allows them to set prices above competitive levels, potentially resulting in deadweight loss and inefficient allocations of resources.
Tips
One common mistake is assuming that imperfect market structures always lead to maximized consumer surplus or little control by participants, which is characteristic of perfect competition rather than imperfect markets.
Sources
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