All but One of the Following Have Been Suggested by Some

question 220

Multiple Choice

All but one of the following have been suggested by some economists as possible consequences of path dependency and switching costs.Which of the following is not a possible consequence of path dependency and switching costs?

• A)Consumers may get locked into using products with inferior technology.
• B)market failure
• C)diseconomies of scale
• D)Government intervention may be necessary in affected markets in order to improve economic efficiency.

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Definitions:

Market Failures

Situations where the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.

Environmental Regulations

Laws and rules designed to protect the environment that set limits on pollution, require permits for certain activities, and impose penalties for violations.

Special Interests

Groups that seek to influence governmental or organizational decisions in favor of their specific concerns or objectives.

Transaction Costs

Expenses incurred when buying or selling goods or services, including search, bargaining, and enforcement costs of a deal.