When the market does not result in an efficient allocation of scarce resources, economists say there has been _.
A)market dropout.
B)normative economics.
C)market disincentives.
D)market failure.

Question

Quizplus · Accepted Answer

When the market does not result in an efficient allocation of scarce resources, economists refer to this phenomenon as market failure. This means that the market has not efficiently allocated goods and services to consumers and producers, resulting in an inefficient allocation of resources. Market failure can occur due to a variety of reasons, including externalities, public goods, incomplete information, and monopoly power.

When the Market Does Not Result in an Efficient Allocation