The term market failure refers to
A) a situation in which the market on its own fails to allocate resources efficiently.
B) an unsuccessful advertising campaign which reduces demand for a product.
C) a situation in which competition among firms becomes ruthless.
D) a firm which is forced out of business because of losses.

Question

Quizplus · Accepted Answer

Market failure occurs when the market fails to allocate resources efficiently, resulting in an inefficient allocation of goods and services. This can occur for various reasons, including externalities, public goods, and monopolies.

The Term Market Failure Refers to