Which of the following is a source of market failure?
A)unforeseen circumstances which leads to the bankruptcy of many firms
B)a lack of government intervention in a market
C)incomplete property rights or inability to enforce property rights
D)an inequitable income distribution

Question

Quizplus · Accepted Answer

Incomplete property rights or inability to enforce property rights can lead to market failure as it can result in the overuse or underuse of resources, leading to negative externalities and inefficient allocation of resources. A lack of clear property rights can lead to the tragedy of the commons, where no single individual takes responsibility for the upkeep of resources, leading to their degradation.

Which of the Following Is a Source of Market Failure