Supply-side market failure
A)arises in situations in which a firm does not have to pay the full cost of producing its output.
B)arises when it is impossible to charge consumers what they are willing to pay for a product.
C)exists in equilibrium with supply-side market failure.
D)happens only when the quantity of a good demanded is less than that which is supplied.

Question

Quizplus · Accepted Answer

Supply-side market failure occurs when a firm does not bear the full cost of producing its output. This can lead to an inefficient allocation of resources as the firm does not take into account the negative externalities it creates, resulting in an overproduction of the product.

Supply-Side Market Failure