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Matthew Hutsell
on Nov 17, 2024

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The term market failure refers to

A) a situation in which the market on its own fails to allocate resources efficiently.
B) an unsuccessful advertising campaign which reduces demand for a product.
C) a situation in which competition among firms becomes ruthless.
D) a firm that is forced out of business because of losses.

Market Failure

A circumstance where goods and services are distributed ineffectively by a market operating without restrictions, commonly leading to a decline in social welfare.

Allocate Resources

The process of distributing available resources among various competing needs and wants in order to achieve desired outcomes efficiently and effectively.

Efficiently

Attaining the highest level of efficiency by minimizing unnecessary effort or cost.

  • Determine examples of market failure and apprehend its underlying causes.
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JB
Jordale ByersNov 20, 2024
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