When the allocation of resources in a free market environment is such that a different allocation would increase society's welfare,economists say:
A)market failure has occurred.
B)the efficiency condition is met.
C)decision makers have faced the full marginal benefits and marginal costs of their decisions.
D)producers have maximized total cost.

Question

Quizplus · Accepted Answer

When the allocation of resources in a free market environment is such that a different allocation would increase society's welfare, economists say a market failure has occurred. This means that the free market has not efficiently allocated resources, resulting in an outcome that is suboptimal for society as a whole.

When the Allocation of Resources in a Free Market Environment