Market Failures ________ and Generate ________

question 19

Multiple Choice

Market failures ________ and generate ________.

• A)compel the government to act; regulations
• B)create monopolies or oligopolies; deadweight loss
• C)reduce economic efficiency; deadweight loss
• D)create deadweight loss; externalities

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Definitions:

P = MC

The condition where the price of a good equals its marginal cost, representing an equilibrium in perfect competition markets.

Technological Progress

The advancement in technology which increases production efficiency and leads to economic growth.

Demand for Labor

The total amount of labor that employers want to hire at various wage rates.

Marginal Revenue

The additional income earned by selling one more unit of a good or service.