When the market does not lead to an optimal allocation of resources,there must be

Question

Quizplus · Accepted Answer

When the market does not lead to an optimal allocation of resources, it indicates a market failure. This can occur due to various reasons such as externalities, information asymmetry, public goods, and monopolies. In such situations, there might be a need for intervention by the government or other regulatory bodies to correct the market failure and ensure an efficient allocation of resources. Therefore, option B is the best choice. Option A and C might not necessarily be appropriate solutions to correct market failure.

When the Market Does Not Lead to an Optimal Allocation