N-body simulations of structure formation with scale-invariant primordial p
erturbations show significantly more virialized objects of dwarf-galaxy mas
s in a typical galactic halo than are observed around the Milky Way. We sho
w that the dearth of observed dwarf galaxies could be explained by a dramat
ic downturn in the power spectrum at small distance scales. This suppressio
n of small-scale power might also help mitigate the disagreement between cu
spy simulated halos and smooth observed halos, while remaining consistent w
ith Lyman-alpha-forest constraints on small-scale power. Such a spectrum co
uld arise in inflationary models with broken-scale invariance.