A Market Failure Can Best Be Defined as a Situation

question 19

Multiple Choice

A market failure can best be defined as a situation where:

• A)Markets enable buyers to gain utility.
• B)Markets fail to allocate resources efficiently.
• C)Markets fail to enable sellers to make profits.
• D)Markets encourage people to take risks.

---

Definitions:

Average Variable Costs

Calculated by dividing the total variable costs by the quantity of output produced; it's the variable cost per unit of output.

Average Variable Costs

an economic measure representing variable costs (expenses that change with production levels) averaged over a quantity of output.

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit of a good changes as the production volume is increased.

Average Variable Cost Curve

A graph that displays how the variable cost per unit changes with changes in output level.