Which of the following is true?
A)Producing too much pollution could be a market failure, but producing too little research cannot.
B)Producing too little research could be a market failure, but producing too much pollution cannot.
C)Both producing too much pollution and producing too little research could be market failures.
D)Market failures mean that government intervention in those areas will improve the results.

Question

Which of the following is true?
A)​Producing too much pollution could be a market failure, but producing too little research cannot.
B)​Producing too little research could be a market failure, but producing too much pollution cannot.
C)​Both producing too much pollution and producing too little research could be market failures.
D)​Market failures mean that government intervention in those areas will improve the results.

Quizplus · Accepted Answer

Both producing too much pollution and producing too little research could lead to market failures. In the case of pollution, the negative externalities imposed on society (such as health problems and environmental damage) may not be reflected in the price, resulting in an overuse of polluting goods or services. In the case of too little research, there may be insufficient investment in areas that are socially valuable but not immediately profitable, such as basic scientific research. Both of these scenarios could benefit from government intervention to correct the market failure.

Which of the Following Is True