Asked by Queen Owusu on Jul 04, 2024
Verified
If many people in a community get flu shots, the whole community benefits, including those who did not get flu shots. Therefore, not enough people may decide to get the shots. This is one illustration of
A) the market allocating resources efficiently.
B) monopoly power due to lack of competition.
C) supply-side market failure.
D) demand-side market failure.
Market Allocating Resources
The process through which a free market economy determines the distribution of resources based on supply and demand dynamics.
Flu Shots
Vaccinations that protect against the influenza virus, recommended annually to prevent the spread of the flu.
- Evaluate the instances of market failures and the function of government intervention to mitigate them.
Verified Answer
RR
Rodney ReynaJul 07, 2024
Final Answer :
D
Explanation :
This scenario is an example of a demand-side market failure because it illustrates a situation where the benefits of a good or service (in this case, flu shots) extend beyond those who directly pay for or consume it, leading to underconsumption. This is because individuals may not get vaccinated, relying on others to do so to create herd immunity, which benefits even those who are not vaccinated.
Learning Objectives
- Evaluate the instances of market failures and the function of government intervention to mitigate them.