Ask Question
BusinessBusiness
14 May, 18:38

The term market failure refers to a. a situation in which the market on its own fails to allocate resources efficiently. b. an unsuccessful advertising campaign which reduces demand for a product. c. a situation in which competition among firms becomes ruthless. d. a firm that is forced out of business because of losses.

+4
Answers (2)
  1. 14 May, 20:46
    0
    A) a situation in which the market on its own fails to allocate resources efficiently.

    Explanation:

    A market failure happens when the total output of a good or service is less than or more than the socially optimal quantity.

    In real life, a market is never able to achieve a socially optimal output, but coming close is generally good enough. When the price of a good or service is lower than the marginal social cost, then an over production and over consumption of the good will occur. On the other hand, when the price of a good or service is higher than the marginal social cost, then an under production and under consumption of the good will occur.

    The greatest problems happen when there is an over provision of demerit goods, or private goods or services that are over consumed generating negative externalities.

    The under production of merit goods is also a problem, since private goods that generate positive externalities aren't produced in enough quantities to satisfy the demand.

    Marginal social cost = marginal private cost + marginal external costs ( + or - )
  2. 14 May, 21:53
    0
    Answer: A. a situation in which the market on its own fails to allocate resources efficiently.

    Explanation: A Market Failure is an economic situation in which the Market fails to allocate resources efficiently in a free market economy.

    The market is a place where goods and services are exchange and if the management of the market is not well coordinated, it will lead to Market Failure.

    There are different types of market failure which are:

    1. Public goods

    2. Market control

    3. Externalities

    4. Imperfect information.

    There are also some causes of market failure and they are:

    1. Power abuse (a monopoly)

    2. A sole buyer of a factor of production

    3. Improper or incomplete distribution of information

    4. Externalities and public goods.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The term market failure refers to a. a situation in which the market on its own fails to allocate resources efficiently. b. an unsuccessful ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
A jeweler can potentially use two inputs in her handcrafted jewelry: copper or bronze. She finds that when she minimizes her costs, she either uses copper or bronze but not both.
Answers (1)
Heap Corporation is considering an investment in a project that will have a two year life. The project will provide a 10% internal rate of return, and is expected to have a $40,000 cash inflow the first year and a $50,000 cash inflow in the second
Answers (1)
During 2017, Lopez Corporation disposed of Pine Division, a major component of its business. Lopez realized a gain of $3,000,000, net of taxes, on the sale of Pine's assets. Pine's operating losses, net of taxes, were $3,500,000 in 2017.
Answers (1)
In your opinion, is the practice of requiring a credit card for a reservation considered reservation?
Answers (1)
A sales receipt is a. used when recording a sale on the account b. used to track cash receipts received from a sale c. used when cash is collected at the time of a sale d.
Answers (2)
New Questions in Business
El Capitan Foods has a capital structure of 37% debt and 63% equity, its tax rate is 35%, and its beta (leveraged) is 1.45. Based on the Hamada equation, what would the firm's beta be if it used no debt, i. e., what is its unlevered beta, bU?1.050.
Answers (1)
The total product curve: a. will become flatter as output increases if there are diminishing returns to the variable input. b. will be downward-sloping if there are diminishing returns to the variable input. c.
Answers (1)
Using monetary theory, one can show that the price level (index) in an economy is equal to: (a) the inflation rate minus the interest rate. (b) the average change in the level of trade over the past 5 quarters. (c) the velocity of money.
Answers (1)
According to circus founder P. T. Barnum, what happens without publicity? Question 3 options: Business failure Decline in customers Increased productivity Nothing
Answers (2)
Which of any essential product that will be affected by an increase in fuel which is very important even to the poorest of the poor
Answers (1)
Home » Business » The term market failure refers to a. a situation in which the market on its own fails to allocate resources efficiently. b. an unsuccessful advertising campaign which reduces demand for a product. c.
Sign Up Forgot Password?