A situation in which a market left on its own fails to allocate resources efficiently is known as:
A)scarcity
B)opportunity cost
C)market failure
D)market power

Question

Quizplus · Accepted Answer

Market failure refers to a situation where the market fails to allocate resources efficiently, leading to an inefficient allocation of resources. This can occur due to various factors such as externalities, imperfect competition, public goods, and information asymmetry. In such a scenario, the government may need to intervene and correct the market failure. Scarcity and opportunity cost are economic concepts, but they do not necessarily indicate market failure. Market power refers to a situation where a single firm has the ability to influence market outcomes and is not necessarily indicative of a market failure.

A Situation in Which a Market Left on Its Own