Which of the following is a good example of market failure?

Question

Quizplus · Accepted Answer

Pollution is a good example of market failure because the cost of pollution may not be reflected in the prices of goods or services causing negative externalities such as health problems and environmental damage to individuals and society as a whole. As a result, markets may not allocate resources efficiently, and government intervention might be necessary to mitigate the negative impacts. Gas prices, taxes on gasoline, and employment insurance are not necessarily market failures as they do not involve externalities that impose costs on society beyond those involved in the transaction itself.

Which of the Following Is a Good Example of Market