Economics · Market Failure
What does 'market failure' refer to in economics?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A situation where the market allocation of goods and services is not efficient✓
- 2A situation where both consumer and producer surpluses are maximized
- 3A situation where a free market of individuals acting in self-interest leads to socially desirable results
- 4A situation where consumer surplus ceases to exist completely
Correct answer
A situation where the market allocation of goods and services is not efficient
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