Informational deficits of producers or consumers, plus problems of externalities, can:

Question

Quizplus · Accepted Answer

Informational deficits of producers or consumers and problems of externalities can lead to a situation where the free market cannot allocate resources efficiently. This represents a market failure because the market fails to consider certain costs or benefits, resulting in an inefficient allocation of resources. ADR cannot always solve such problems, nor do they restrict the use of property rights in a market economy, nor do they improve free trade.

Informational Deficits of Producers or Consumers, Plus Problems of Externalities