A Market Failure Is a Situation in Which

question 261

Multiple Choice

A market failure is a situation in which

• A) resources are being efficiently allocated, but some companies are forced to shut down.
• B) the market equilibrium leads to either too many or too few resources going towards producing the good or service.
• C) the government must take actions to correct the failures of the market in a particular industry.
• D) there is no free entry or exit into an industry.

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Definitions:

Water Pollution

The contamination of water bodies, such as lakes, rivers, oceans, and groundwater, with pollutants that negatively affect the water quality and aquatic ecosystems.

Natural Resource

Materials or substances occurring in nature which can be exploited for economic gain, such as minerals, forests, and water.

Endangered Species

Species of animals or plants that are at risk of extinction due to threats like habitat loss, climate change, or overexploitation.

Geographic Location

The specific physical position of a place or entity on the Earth's surface, often defined by coordinates such as latitude and longitude.