Market Failure Occurs When

question 332

Multiple Choice

Market failure occurs when

• A) the price system fails to generate an efficient allocation of resources.
• B) the price system fails to generate an equal distribution of income.
• C) the price system fails to generate an equal distribution of wealth.
• D) the price system allows consumers to make their own decisions.

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Definitions:

Total Wealth

The sum of all financial assets and physical possessions that have a monetary value owned by an individual or organization.

Reverse Stock Split

A corporate action that reduces the number of a company's outstanding shares by combining them into fewer, proportionally more valuable shares.

Market Price

The immediate price at which an asset or service is open for buying or selling.

Shares Outstanding

The total number of a company's shares of stock that are owned by shareholders, including those held by institutional investors and company officers.