An example of a market failure is
A)a firm is dumping toxic waste that is making people sick.
B)when not everyone who wants to see a major league football game can.
C)when there is an increase in demand and a shortage develops.
D)unemployment.

Question

Quizplus · Accepted Answer

This is an example of a negative externality, where the firm's actions are causing harm to individuals who are not involved in the transaction. The market has failed to account for the cost of the pollution and its impact on public health.

An Example of a Market Failure Is