Asked by Eveleen Zapata on Jul 03, 2024
Verified
Potential entry by new firms and competition from imports tend to worsen the economic inefficiency in an oligopoly.
Potential Entry
The possibility or threat of new competitors entering a market, which can influence the behavior and strategies of existing firms.
Economic Inefficiency
Economic Inefficiency occurs when resources are not allocated optimally, leading to waste or missed opportunities in the production or distribution of goods and services.
Oligopoly
A market structure characterized by a small number of firms which dominate the market, leading to limited competition.
- Comprehend the attributes and consequences of oligopoly market configurations.
Verified Answer
MB
Martha BonettJul 09, 2024
Final Answer :
False
Explanation :
Potential entry by new firms and competition from imports can actually reduce economic inefficiency in an oligopoly by increasing competition, which often leads to lower prices and improved quality for consumers.
Learning Objectives
- Comprehend the attributes and consequences of oligopoly market configurations.