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What Is Market Failure? How Can the Government Correct Market

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What is market failure? How can the government correct market failure?


Definitions:

Internal Search

The process by which consumers use their own memory and knowledge to identify possible choices in purchasing decisions.

External Search

The process consumers engage in by seeking information from sources outside of their personal knowledge base to make informed purchase decisions.

Problem Recognition

The initial step in the buying process where a consumer identifies a need or a problem that triggers the search for a product or solution.

Alternative Evaluation

The stage in the buying decision process where consumers compare different products or brands on various attributes to narrow down their choices.

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