Economics Market Failures Questions
The tragedy of the oligopoly refers to a situation where a few large firms dominate a particular market, resulting in limited competition and potential negative outcomes for consumers. This relates to market failures because oligopolies can lead to inefficient allocation of resources, higher prices, reduced consumer choice, and decreased innovation. Additionally, the lack of competition in an oligopoly can result in collusion among firms, leading to anti-competitive behavior and further exacerbating market failures.