Market failure refers to firms that go bankrupt because they do not produce the goods and services that consumers want.

Question

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Market failure refers to a situation where the market does not allocate resources efficiently, resulting in a loss of economic and social welfare. It can occur due to a variety of reasons such as monopoly power, externalities, asymmetric information, public goods, etc. It is not solely related to firms going bankrupt.

Market Failure Refers to Firms That Go Bankrupt Because They