What does the term market failure mean?
A)The inability of markets to ensure that people get what they want.
B)The inability of markets to ensure that an efficient or equitable allocation of resources is attained.
C)The inability of the government to ensure that productive or allocative efficiency is attained.
D)The inability of the government to ensure that people get what they want.

Question

Quizplus · Accepted Answer

Market failure refers to situations where markets fail to achieve an efficient or equitable allocation of resources. Therefore, option B is the correct choice. Options A and D do not take into account the role of markets or the government. Option C refers to government failure, which is a different concept than market failure.

What Does the Term Market Failure Mean