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9. Market efficiency and market failure Suppose that the following graph shows a free market equilibrium, with OF as the equilibrium quantity. Supply PRICE Demand

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9. Market efficiency and market failure Suppose that the following graph shows a free market equilibrium, with OF as the equilibrium quantity. Supply PRICE Demand QUANTITY For an output level above OF, the value of a unit to a buyer is the cost of a unit to a seller. Suppose a firm that produces for this market is able to influence the market price, which leads to an outcome that differs from the free market equilibrium shown in the previous graph. Such a situation is characterized by , which is an example of

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