Answer
1. Market Power- it keeps the price and quantity away from the levels determined by the equilibrium of supply and demand.
2. Externalities- buyers and sellers ignore these effects when deciding how much to consume and produce.
Work Step by Step
Market power is the ability of a single buyer or seller in influence prices. This means that the market is not perfectly competitive, as what is assumed.
Externalities are side effects of the production/consumption of items that affect people other than the buyer or seller. This goes against the assumption that the outcome in a market matters only to the participants in that market.
