Commons problems produce market failures because there are few incentives to prevent environmental degradation.

Name: Commons problems produce market failures because there are few incentives to prevent environmental degradation.
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Question

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When resources are commonly owned, individuals have no incentive to conserve them, leading to overuse and depletion. This results in market failures as the true cost of resource depletion is not reflected in market prices, leading to inefficient allocation of resources.

Commons Problems Produce Market Failures Because There Are Few Incentives