A market failure occurs when the government steps in and failingly attempts to alleviate the tragedy of the commons.

Question

Quizplus · Accepted Answer

A market failure occurs when the market fails to allocate resources efficiently due to externalities, asymmetric information, monopolies or public goods. The tragedy of the commons occurs when a resource is overused and depleted due to the absence of property rights, not market failure. While government intervention may be necessary to address the tragedy of the commons, it is not a market failure in itself.

A Market Failure Occurs When the Government Steps in and Failingly