When the market system does not generate the optimal, or efficient, allocation of goods and services a ___________________ occurs.
A)public good
B)private good
C)market instability
D)market failure

Question

Quizplus · Accepted Answer

Market failure occurs when the market system fails to allocate resources efficiently, resulting in an inefficient allocation of goods and services. This can happen due to externalities, public goods, monopoly power, and other factors.

When the Market System Does Not Generate the Optimal, or Efficient