Final answer:
Demand-side market failures occur when there is a lack of information, external costs or benefits are not accounted for, and there is a lack of competition in the market.
Step-by-step explanation:
Market failures occur when there are certain conditions not met in the market. One of these conditions is a lack of information available to both buyers and sellers. This means that when there is insufficient information about the product or service, it can lead to market failures.
Another condition that can lead to market failures is when there are external costs or benefits that are not accounted for. For example, if a company is polluting the environment but the cost of the pollution is not included in the price of the product, it can lead to market failures.
Additionally, market failures can occur when there is a lack of competition in the market. Monopoly or oligopoly, where there is only one or a few dominant players in the market, can lead to market failures due to lack of competition.
Therefore, demand-side market failures occur when there is a lack of information about the product or service, when there are external costs or benefits that are not accounted for, and when there is a lack of competition in the market.