Sometimes the response to price signals,rather than the signals themselves,may be flawed.
The market may fail even when the price signals are accurate.The response to price signals,rather than the signals themselves,may be flawed.For example,there may be externalities present.

Question

Quizplus · Accepted Answer

This statement is true. Even if the price signals accurately reflect supply and demand, the market may still fail due to externalities or flawed responses to price signals.

Sometimes the Response to Price Signals,rather Than the Signals Themselves,may