Whenever there is a divergence between social costs and market costs,the result is:

Question

Quizplus · Accepted Answer

When there is a divergence between social costs and market costs, it means that the market is not properly reflecting the true costs of certain actions or goods. This can lead to inefficiencies, negative externalities, and an overall failure of the market to allocate resources efficiently. Therefore, the best choice would be market failure. The other options do not address the issue of the market failing to account for social costs.

Whenever There Is a Divergence Between Social Costs and Market