How Do the Concepts of Market Failure and Failure of Market

question 9

Multiple Choice

How do the concepts of market failure and failure of market outcome relate to the concept of economic efficiency?

• A) Market failure means the economy is not economically efficient; failure of market outcome could happen even if the economy is economically efficient.
• B) Failure of market outcome means the economy is not economically efficient; market failure could happen even if the economy is economically efficient.
• C) Both market failure and failure of market outcome mean that the economy is not economically efficient.
• D) Both market failure and failure of market outcome could happen even if the economy is economically efficient.

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Definitions:

Odd-Even Pricing

Setting prices a few dollars or cents under an even number.

Customary Pricing

A pricing strategy where the price of a product or service is based on what is traditional or expected in the industry, rather than being determined by market dynamics or costs.

Everyday Lower Pricing

A pricing approach where businesses maintain consistently low prices for their products instead of depending on sales or markdowns.

List Price

The advertised or published price of a product or service before any discounts, rebates, or special offers are applied.