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Eduncle posted an MCQ
October 17, 2019 • 21:03 pm 0 points
  • UGC NET
  • Economics

Which of the following factors is NOT the cause for 'market failure'?

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    Eduncle Best Answer

    Market failure is the economic situation defined by an inefficient distribution of goods and services in the free market. Furthermore, the individual incentives for rational behavior do not lead to rational outcomes for the group. Put another way, each individual makes the 

    correct decision for him/herself, but those prove to be the wrong decisions for the group. In traditional microeconomics, this is shown as a steady state disequilibrium in which the quantity supplied does not equal the quantity demanded.
    Common causes of market failure :
    1. Common Property Resources
    2. Externalities
    3. Public Goods
    4. Asymmetric Information

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