In the case of ______,the invisible hand fails to generate the efficient outcome because buyers and sellers only take their self-interests into account.
A)either an external cost or an external benefit
B)only an external cost
C)only an external benefit
D)unregulated markets

Question

Quizplus · Accepted Answer

When there are externalities the market equilibrium price does not capture the true cost or benefit and so the market equilibrium is not efficient.

In the Case of ______,The Invisible Hand Fails to Generate