What do economists mean when they say there is "market failure"?
A) Business has introduced a product that consumers do not want.
B) Free markets have led to excessive profits.
C) Markets have surpluses or shortages so that government rationing is necessary.
D) Free markets yield results that economists do not consider socially optimal.

Question

Quizplus · Accepted Answer

Market failure occurs when free markets fail to allocate resources efficiently or equitably, leading to outcomes that are not socially optimal, such as externalities or public goods issues.

What Do Economists Mean When They Say There Is "Market