When Market Failures Occur

question 346

Multiple Choice

When market failures occur,

• A) the invisible had will correct for the market failures.
• B) the price system will correct the market failures.
• C) people will reduce their consumption.
• D) the government can step in to correct the market failure.

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Definitions:

Voting Shares

Shares of a company that provide the shareholder the right to vote on corporate matters, such as the election of the board of directors.

Open Market

A market where buying and selling of goods and services take place with minimal restrictions or regulations, often referring to the stock market.

Ownership Percentage

The fraction or percentage of a company that is owned by a shareholder or group of shareholders.

Voting Shares

Shares that give the shareholder the right to vote on corporate matters.