Question

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.

Answer 1

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.