Question

A market failure is most likely to occur when: Multiple Choice many producers produce identical products, and only the consumers are affected by the transactions. a sole producer of a good faces no threat of competition. several producers of a good compete for customers by having price wars. several producers of a good search for the lowest-cost method of production.

Answer 1

a sole producer of a good faces no threat of competition.

Step-by-step explanation:

A market failure can be defined as a situation where there is inefficiency in the distribution of goods and services from the producers to the consumer in a free or open market.

A market failure is most likely to occur when a sole producer of a good faces no threat of competition. This ultimately implies that, a sole producer of a product is the sole determinant of prices of goods, quantity of goods and even choose to hoard the goods, thereby resulting in a market failure.