Which of the following is the best example of a market failure that would lead a firm to extract resources at a rate that is faster than the rate that would maximize its long-term stream of profits?

Question

Quizplus · Accepted Answer

Weak property rights create uncertainty for firms regarding their ability to extract resources in the future. This uncertainty can lead firms to extract resources at a faster rate than what would maximize their long-term stream of profits, in order to secure as much of the resource as possible while they still can.

Which of the Following Is the Best Example of a Market