The term market failure refers to
A)a market that fails to allocate resources efficiently.
B)an unsuccessful advertising campaign which reduces demand.
C)ruthless competition among firms.
D)a firm that is forced out of business because of losses.

Question

Quizplus · Accepted Answer

Market failure occurs when a market fails to allocate resources efficiently, either in terms of the distribution of goods and services or in terms of their pricing. This leads to a situation where the market outcome is not the best possible outcome from society's perspective.

The Term Market Failure Refers to