Situations in which the assumption of efficient,competitive markets fails to hold are called:

Question

Quizplus · Accepted Answer

Market failures occur when the assumptions of a competitive market, such as perfect information, no barriers to entry, and homogeneous products or services, do not hold. Market failures can result in inefficient outcomes, such as monopolies, negative externalities, or public goods being underprovided. In such cases, there may be a need for government intervention to correct the inefficiencies and allow for a more efficient allocation of resources. Options B), C), and D) do not accurately describe situations where competitive markets fail to hold.

Situations in Which the Assumption of Efficient,competitive Markets Fails to Hold