QuestionJune 25, 2025

Market failure describes a situation in which the market itself __ in a way that balances social costs and benefits. avoids externalities fails to allocate resources efficiently remains outside the transaction incurs the costs outside the production process

Market failure describes a situation in which the market itself __ in a way that balances social costs and benefits. avoids externalities fails to allocate resources efficiently remains outside the transaction incurs the costs outside the production process
Market failure describes a situation in which the market itself
__
in a way that balances social costs and benefits.
avoids externalities
fails to allocate resources efficiently
remains outside the transaction
incurs the costs outside the production process

Solution
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Answer

fails to allocate resources efficiently Explanation 1. Identify the definition of market failure Market failure occurs when the market fails to allocate resources efficiently, leading to a situation where social costs and benefits are not balanced.

Explanation

1. Identify the definition of market failure<br /> Market failure occurs when the market fails to allocate resources efficiently, leading to a situation where social costs and benefits are not balanced.
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