(Answered) Markets without enough competition will produce q, output.Markets without enough competition will…

➤ How does insufficient competition affect economic efficiency and welfare?
Lack of competition reduces allocative and productive efficiency. Firms may produce at higher cost and smaller scale, so output quality and innovation can decline. Consumers pay more while total surplus shrinks, creating a deadweight loss. Markets also encourage rent-seeking and weaker incentives to adopt cost-saving technologies or expand productive capacity.