How Do the Concepts of Market Failure and Failure of Market

question 30

Multiple Choice

How do the concepts of market failure and failure of market outcome relate to the concept of Pareto optimality?

• A) Market failure is judged by the criteria of Pareto optimality; failure of market outcome rejects Pareto optimality as the sole criterion.
• B) Failure of market outcome is judged by the criteria of Pareto optimality; market failure rejects Pareto optimality as the sole criterion.
• C) Both market failure and failure of market outcome are judged by the criteria of Pareto optimality.
• D) Both market failure and failure of market outcome reject the criteria of Pareto optimality for another criterion.

---

Definitions:

Differentiation Strategy

A business approach where a company seeks to distinguish its products or services from competitors' offerings through unique features and benefits.

Strategic Positioning

The process of determining how to distinguish an organization's offerings from competitors' to attract and maintain customers.

Meganational Strategy

A strategy used by corporations that operate on a global scale, focusing on maximizing their reach and resources across multiple national borders.

Adaptation

The process of change by which an individual or group becomes better suited to its environment or circumstances, often involving modifications in structure, behavior, or practices.