Market failure occurs when:
A)the stock markets tumble due to heavy selling.
B)the market economy fails to allocate resources efficiently.
C)demand shows signs of slowing down.
D)a country cannot produce a particular good or service at a lower opportunity cost than other countries.

Question

Market failure occurs when:​
A)​the stock markets tumble due to heavy selling.
B)​the market economy fails to allocate resources efficiently.
C)​demand shows signs of slowing down.
D)​a country cannot produce a particular good or service at a lower opportunity cost than other countries.

Quizplus · Accepted Answer

Market failure occurs when the market economy fails to allocate resources efficiently, resulting in an inefficient distribution of goods and services. This can occur due to externalities, public goods, monopoly power, incomplete information, and other market distortions. It is not related to stock market fluctuations, slowing demand, or comparative advantage.

Market Failure Occurs When:​

Market Failure Occurs When: