Sources of market failure includeA) external benefits.B) external costs.C) public goods.D) All of the above are correct.

Question

Sources of market failure includeA)  external benefits.B)  external costs.C)  public goods.D)  All of the above are correct.

Hayley Scott · Accepted Answer

Final Answer : D, Explanation :  Market failure can occur due to external benefits (when the social or economic benefits of a product or service are not reflected in its market price), external costs (when the production or consumption of a product or service imposes costs on third parties that are not reflected in the market price), and public goods (which are non-excludable and non-rivalrous, leading to issues like free-riding). All these factors can prevent markets from efficiently allocating resources, hence they are considered sources of market failure.

Sources of market failure include

A) external benefits.
B) external costs.
C) public goods.
D) All of the above are correct.

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