Question

People enjoy outdoor holiday lighting displays and would be willing to pay to see these displays but can't be made to pay. Because those who put up lights are unable to charge others to view them, they don't put up as many lights as people would like. This is an example of a:___________.
1. negative externality.
2. demand-side market failure.
3. supply-side market failure.
4. government failure

Answer 1

Answer: (2) Demand-side market failure

Explanation:

 The demand side market failure is one of the type of market effect that basically occur due to the production of the negative response and the effect by the various types of marketing techniques like surveys and the focus groups.

The market failure demand side is one of the type of economical situation in which the customers are willing to pay for the specific products and the services in the market which is not fully capture.

According to the given question, the demand- side market failure is one of the example that best illustrating the given situation. Therefore, Option (2) is correct answer.