Sources of market failure include A) private goods. B) competitive behavior. C) externalities. D) unequal income distribution.

Question

Leonidas Flowers

Business

17 August, 05:01

Sources of market failure include A) private goods. B) competitive behavior. C) externalities. D) unequal income distribution.

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Answers (1)

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Johan Woodward · Answer 1

C) externalities

Explanation:

Market failure -

It is the condition when the free - market system fails to fulfill the needs of the society.

The private market does not work efficiently by bringing the allocation of the resources.

And, hence, the government intervene into this situation to fulfill the needs of the society.

The sources of market failure is as follows -

externalities (i. e the third person side effects). monopolies. public goods. unfair distribution of income leading to standard of living issues (arguable).