The Term Market Failure Refers to

question 300

Multiple Choice

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 which is forced out of business because of losses.

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Definitions:

Business Judgment Rule

A legal principle that protects corporate directors and officers when making business decisions, assuming those decisions are made in good faith and with due care.

Duty of Care

The legal obligation of a person to exercise a reasonable standard of care while performing any acts that could foreseeably harm others.

Officer

An individual appointed or elected to an executive position within an organization, often with specific duties and responsibilities.

Goal Setting

The process of identifying specific, measurable, achievable, relevant, and time-bound objectives.