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In: Economics

QUESTION 9 Market failures occur when economic efficiency increases. there is an increase in demand. externalities...

QUESTION 9

  1. Market failures occur when

    economic efficiency increases.

    there is an increase in demand.

    externalities exist.

    there is a change in quantity demanded.

Solutions

Expert Solution

Answer--Market failures occur when--Option C externalities exist because in this case market failure occurs due to the balance of the price of a product or service, which does not correctly represent correct costs and benefits of that goods or services.

Option A is an incorrect answer because economic efficiency does not create market failure ,by the economic efficiency markets becomes more strong.

Option B is an incorrect answer because if there is an increase in demand it will contribute towards economic development.

Option D is an incorrect because if there is a change in quantity demanded then it can have both results increase or decrease in the economic conditions.

Rahul Sunny answered 2 years ago
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