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Akimi4 [234]
2 years ago
7

Market failure describes a situation in which the market itself ________ in a way that balances social costs and benefits.

Business
1 answer:
Lina20 [59]2 years ago
8 0

A situation known as a "market failure" occurs when the market itself is unable to efficiently distribute resources in a way that balances social costs and benefits.

Market failure refers to a situation where there is an inefficient allocation of products and services on the open market. The individual incentives for rational behavior do not result in rational outcomes for the collective in a market failure.

In other words, each person chooses what is best for themselves, but those choices end up being bad for the collective. This can occasionally be demonstrated in conventional microeconomics as a steady-state disequilibrium condition.

To learn more about Market failure here

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