The provision of private goods is an example of a market failure.

Question

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The provision of private goods is not an example of market failure. Private goods are goods that are allocated to an individual or group of individuals who have purchased them through the market. The market mechanism efficiently allocates private goods because individuals have the ability to determine their own demand for the goods and to pay for them accordingly. Market failure occurs when the market mechanism fails to allocate resources efficiently, either producing too many or too few goods than society needs. Examples of market failure include externalities, public goods, and information asymmetry.

The Provision of Private Goods Is an Example of a Market