What are two causes of market failure?
A)externalities and market power
B)market power and incorrect forecasts of consumer demand
C)externalities and foreign competition
D)incorrect forecasts of consumer demand and foreign competition

Question

Quizplus · Accepted Answer

Externalities (where costs or benefits of a transaction are borne by parties not involved in the transaction) and market power (where a single buyer or seller has control over the price and quantity of a good or service) are two common causes of market failure. Option B, C, and D are incorrect as they do not include externalities, which is one of the most significant causes of market failure.

What Are Two Causes of Market Failure