Which of the following is not a market failure?
A) A lack of competition in some markets.
B) Prices determined in competitive markets, where an individual consumer has no control over price.
C) The presence of externalities in some markets.
D) A lack of public goods desired by a majority of citizens.

Question

Quizplus · Accepted Answer

Prices determined in competitive markets are not a market failure, but rather the efficient outcome of market forces. Even though individual consumers may not have control over prices, they still benefit from the competition that drives down prices to the lowest possible level. A lack of competition, externalities, and a lack of public goods are all market failures because they result in inefficient outcomes that do not reflect the true costs and benefits of goods and services.

Which of the Following Is Not a Market Failure