why a market failure occurs in an economy
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Market failure occurs when the price mechanism fails to account for all of the costs and benefits necessary to provide and consume a good. The market will fail by not supplying the socially optimal amount of the good. ... The imbalance causes allocative inefficiency, which is the over- or under-consumption of the good.
Answered by
1
Answer:
Market failure occurs when the price mechanism fails to account for all of the costs and benefits necessary to provide and consume a good. The market will fail by not supplying the socially optimal amount of the good. ... The imbalance causes allocative inefficiency, which is the over- or under-consumption of the good.
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