A market failure occurs when
A) A government policy fails to improve the well-being of society
B) Buyers of a good can't get all of the good they want at the current price
C) Sellers can't find buyers for their goods
D) The market price of a good or service fails to reflect the costs and benefits to all consumers and producers

Question

Quizplus · Accepted Answer

A market failure occurs when the price of a good or service fails to reflect the true costs and benefits to all parties involved, resulting in an inefficient allocation of resources. This can lead to overproduction, underproduction, or the production of goods that are harmful to society.

A Market Failure Occurs When