Market failure means that:

Question

Quizplus · Accepted Answer

Market failure occurs when the market price system fails to allocate resources efficiently, resulting in an inefficient allocation of resources and a problem for society. This can occur due to externalities, public goods, monopoly power, and other factors. Government intervention may be necessary to correct market failure, but it is not always required in every market. Therefore, options A and D are incorrect, while option B is too broad and incorrect.

Market Failure Means That