A Market Failure Is Most Likely to Occur When

question 58

Multiple Choice

A market failure is most likely to occur when:

• A) a sole producer of a good faces no threat of competition.
• B) several producers of a good compete for customers by having price wars.
• C) several producers of a good search for the lowest-cost method of production.
• D) many producers produce identical products, and only the consumers and producers are affected by the transactions.

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Definitions:

Material

A substance or mixture of substances that constitutes an object, used in the production and manufacturing of goods or constructions.

Density

A measure of mass per unit volume of a substance, often expressed in grams per cubic centimeter or kilograms per cubic meter.

Volume

The volume is the space filled by an object or substance, or the space encased by a container.

Sample

A portion or quantity of material taken from a larger body for the purpose of analysis or testing.