Market failure can occur when
A) monopoly power exists in the market.
B) markets are missing.
C) consumers can influence prices.
D) all of these answer options are correct.

Question

Quizplus · Accepted Answer

Market failure can occur for various reasons, including the existence of monopoly power, where a single firm controls the market and can set prices unfavorably; missing markets, where some goods or services are not produced or traded in the market due to externalities or public goods characteristics; and situations where consumers or producers can unduly influence prices, leading to inefficiencies. Therefore, all the given options are correct instances of market failure.

Market Failure Can Occur When