Market failure
A)caused the collapse of centrally planned economies in Eastern Europe.
B)is the consequence of government involvement in the economy.
C)is something that never happens in a market economy.
D)occurs when the market is unable to allocate resources correctly.
E)occurs only when supply exceeds demand.

Question

Quizplus · Accepted Answer

Market failure occurs when the market is unable to allocate resources efficiently or correctly, leading to undesired outcomes such as externalities, public goods, and asymmetric information. This can result in an inefficient allocation of resources, which is detrimental to the overall economy.

Market Failure