Which of the following would most likely be an example of market failure?
A)industrial water pollution
B)eBay transactions
C)tradable pollution permits
D)brokers re-selling tickets for concerts

Question

Which of the following would most likely be an example of market failure?​
A)​industrial water pollution
B)​eBay transactions
C)​tradable pollution permits
D)​brokers re-selling tickets for concerts

Quizplus · Accepted Answer

Industrial water pollution is an example of market failure as it is a negative externality that is not reflected in market prices. The cost of pollution is not borne by the producer, but rather by society as a whole. This results in inefficient allocation of resources and economic welfare loss. The other options do not necessarily represent market failure. eBay transactions represent a well-functioning market, tradable pollution permits account for externalities and promote efficient resource allocation, and brokers re-selling tickets for concerts may represent a market inefficiency but not a market failure per se.

Which of the Following Would Most Likely Be an Example