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Feliz [49]
4 years ago
15

True or False: A local cable company charging so much for subscriptions that most people cannot afford cable television is an ex

ample of market failure due to side effects not taken into account by the market. This is _____.
Business
1 answer:
VladimirAG [237]4 years ago
6 0

Answer: False

Explanation: The failure happened in the case is due to the wrong pricing by the supplier and is not a market failure. The given case illustrates the law of demand that operates due to the income effect.

The cable company in the given case did not do its market research properly and overpriced their product, which resulted in less demand and eventually failure of the product in market.

Thus, from the above we can conclude that the given statement is false.

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