A Market Failure

question 81

Multiple Choice

A market failure

• A)refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal social cost.
• B)refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal private cost.
• C)refers to a situation where an entire sector of the economy (for example, the airline industry)collapses because of some unforeseen event.
• D)refers to a breakdown in a market economy because of widespread corruption in government.

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