Question

When does market failure occur? a. when a company goes bankrupt c. when the money supply increases at a faster pace than output b. when the amount of public goods are less than the amount required d. when goods are not fairly distributed

Answer 1

I believe the correct answer is b.

Answer 2

The correct answer is D) when goods are not fairly distributed.

Market failure occurs when goods are not fairly distributed.

Market failure is the situation when a free market is unable to distribute resources efficiently. The distribution of goods and services in the market is inefficient. To attend a situation like this, the government can create proper legislation, taxes or subsidies to try to help balance the market.