Which of the Following Statements About Market Failure Is Not

question 122

Multiple Choice

Which of the following statements about market failure is not true?

• A) Market failure causes an inefficient allocation of resources, even in a competitive market.
• B) Market failure can come from causes on the demand side or the supply side of a market.
• C) Market failure always results from some government action or policy in a market.
• D) Market failure can result from the number of sellers in a market being too few to ensure competition.

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, granting holders voting rights and dividends.

Par Value

The face value of a bond or the stock value stated in the corporate charter.

Convertible Preferred Stock

A type of preferred stock that gives holders the option to convert their shares into a specified number of common shares, usually after a predetermined date.

Common Stock

A type of equity security that represents ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends.