Asked by HAM?T C?HAN on Jun 26, 2024
Verified
The result of market failure is waste or lost surplus.
Market Failure
A scenario in which the distribution of goods and services through an unregulated market leads to inefficiencies, resulting in a decrease in overall social welfare.
Lost Surplus
Refers to the welfare that is lost to consumers or producers due to market inefficiencies or interventions, such as taxes or price ceilings.
- Understand the origins and results of market collapse.
Verified Answer
SC
Shyam ChhagJun 27, 2024
Final Answer :
True
Explanation :
Market failure occurs when the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss or waste. This can manifest as either lost surplus, including both consumer and producer surplus, or as externalities that are not accounted for in the market price.
Learning Objectives
- Understand the origins and results of market collapse.