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Which type of market distorts market signals?

User OCyril
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1 Answer

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24 votes

Answer:

An example of market distortion is a government subsidising farming activities. By paying farmers subsidies, a farmer's job becomes economically feasible and they're able to create artificially high supply levels, which in turn helps to ensure the nation can afford to eat/drink.

Step-by-step explanation:

A market may become distorted when a single business holds a monopoly or when other factors prevent free and open competition. This often causes problems for consumers—at least in the long run—and their competitors.

User Dhanish Jose
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