Market failure refers to a situation in which:
A)markets fail to reach a fair outcome.
B)markets establish a high price for necessities.
C)market-determined wages are not high enough to raise all workers above the poverty line.
D)markets fail to reach an efficient outcome.

Question

Quizplus · Accepted Answer

Market failure occurs when the market fails to allocate resources efficiently, resulting in a suboptimal outcome. This can happen due to externalities, public goods, imperfect competition, information asymmetry, and other factors that prevent the market from operating efficiently. Therefore, option D is the correct choice.

Market Failure Refers to a Situation in Which