Markets Can Be Missing

question 59

Multiple Choice

Markets can be missing:

• A)because public policy taxes a market.
• B)when the sale of a particular service is banned.
• C)when miscommunication of information between buyers and sellers leads to the wrong equilibrium price.
• D)All of these are true.

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Definitions:

Cartels

Formal agreements among competing firms to control prices or output in a particular market, often to monopolize a market.

Auctions

A sales event where goods or services are sold to the highest bidder in a competitive process.

Bid-rigging

A form of fraud where competing parties conspire to determine the winner of a bidding process, undermining fairness.

Vickery Auctions

An auction format where the highest bidder wins but pays the second-highest bid, encouraging true value bidding.