Excessive pollution is an example of market failure.

Question

Quizplus · Accepted Answer

Market failure occurs when the production or consumption of goods and services do not take into account the costs or benefits for society as a whole. In the case of pollution, businesses may not consider the negative externalities of their actions, such as the harm caused to public health and the environment, resulting in an inefficient allocation of resources and a lack of incentive to reduce pollution. Therefore, excessive pollution is an example of market failure.

Excessive Pollution Is an Example of Market Failure