Which of the following is an example of a market failure?
A)The local state football game is sold-out
B)Because of concerns of impending storm threats, the local hardware store runs out of plywood
C)Because of changes in mortgage loan requirements and regulations, fewer people qualify for mortgages
D)The daily traffic jam on the commute to work

Question

Quizplus · Accepted Answer

Market failure occurs when the allocation of goods and services by a free market is not efficient. Traffic jams are a classic example of a negative externality, a type of market failure where individuals' actions have side effects on others not taken into account by the market.

Which of the Following Is an Example of a Market