Evaluate the following statement: "Competitive price-searcher markets are inefficient relative to purely competitive markets since prices are higher and firms don't produce an output rate that minimizes average total cost. As a result, government action should be undertaken to remedy this situation."

Competitive price-searcher markets do have higher prices, and average total costs are not minimized. However, government intervention is unlikely to improve the situation. Consider the following three points. First, consumers may value the wider variety of quality and styles in competitive price-searcher markets. Second, advertising often reduces search time and provides valuable information. Third, competitive price searchers have incentives to operate efficiently and innovatively.