The situation in which markets fail to provide efficiently is called
A) market failure.
B) uneconomic efficiency.
C) market collapse.
D) government failure.

Question

Quizplus · Accepted Answer

Market failure refers to a scenario in which the market fails to allocate resources efficiently. This occurs because the market may not take into account externalities, public goods, and information asymmetry. As a result, government intervention may be necessary to correct the market failure and ensure economic efficiency. Uneconomic efficiency, market collapse, and government failure are not the correct terms to describe this scenario.

The Situation in Which Markets Fail to Provide Efficiently Is