Which of the following would be an example of market failure?

Question

Quizplus · Accepted Answer

- Second hand cigarette smoke is an example of negative externality, where the cost of the activity is borne by someone else who did not choose to engage in it.
- Lack of funding for education is an example of undersupply of a public good, as education has positive externalities and provides benefits not only to individuals but to society as a whole. 
- Underproduction of a good by a monopoly is an example of market power, where the monopolist restricts the output and charges a higher price, leading to inefficiencies and deadweight losses. All three examples represent market failures where the market does not allocate resources efficiently, and there is a potential role for government intervention to correct the market failure.

Which of the Following Would Be an Example of Market