There is no market failure if
A)the marginal private cost curve is upward sloping.
B)the demand curve (for a good or service) is downward sloping.
C)the demand curve lies about the marginal private cost curve.
D)marginal private costs are greater than the external costs associated with a negative externality.
E)none of the above

Question

Quizplus · Accepted Answer

Market failure occurs when the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss. Options A, B, and D describe normal conditions or scenarios that do not inherently indicate a market failure. Option C is incorrectly phrased (likely intending to discuss the relationship between demand curves and social/marginal costs in the context of externalities), but as stated, none of the options directly imply the absence of market failure by themselves.

There Is No Market Failure If