___________ is/are example(s) of market failure that could justify government intervention in the market.

Question

Quizplus · Accepted Answer

Imperfect information occurs when individuals or firms do not have complete or accurate information about a product or market, which can result in market inefficiencies. Public goods are goods that are non-excludable and non-rival, meaning that individuals cannot be excluded from using the good and one person's use of the good does not diminish another person's use. Therefore, private firms may not have an incentive to provide these goods, and government intervention may be necessary. A dominant firm that undertakes pricing strategies aimed at maintaining high entry barriers can restrict competition and result in higher prices and reduced output, which is another example of market failure. The perfectly competitive bagel market is not an example of market failure since perfect competition is characterized by efficiency and low prices.

___________ Is/are Example(s) of Market Failure That Could Justify Government