Which of the Following Is a Source of Market Failure

question 25

Multiple Choice

Which of the following is a source of market failure?

• A) Unexpected shifts in demand and supply
• B) Monopoly power
• C) Diseconomies of scale
• D) Destructive price wars between firms
• E) Perfect information in markets

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Definitions:

Treasury Bills

Short-term government securities issued at a discount from the face value and maturing at par, used as a means for governments to borrow money.

Call Option

In finance, it refers to a pact allowing the acquiring party the opportunity, without being forced, to purchase assets like securities, bonds, or commodities at a price that is determined beforehand, within a certain time limit.

Exercise Price

The price at which an option holder may buy or sell the underlying security, as specified in the option contract.

Outstanding Debt

The total amount of borrowed money that a company or individual has yet to repay to creditors, including all principal and interest payments due.