"Market failure" refers to situations in which the:
A)actions of private individuals and firms are insufficient to ensure efficient markets.
B)equilibrium in a market is harmful to either the buyer or seller.
C)equilibrium in a market cannot be reached.
D)actions of private individuals and firms are based on insufficient information.

Question

Quizplus · Accepted Answer

Market failure occurs when the actions of private individuals and firms are insufficient to ensure efficient markets. This can be due to externalities, imperfect competition, public goods, or asymmetric information. Market failure results in inefficiency and can lead to a suboptimal allocation of resources. Choices B, C, and D are not correct definitions of market failure.

"Market Failure" Refers to Situations in Which The