Question

D Question 24 3 pts Which is one of the four major reasons for market failure? competitive markets private ownership of resources A lack of competition internalized costs and benefits

Answer 1

A kind of economic situation where in distribution of resources or goods and services are not done efficiently. Such an situtaion cause market to fail. Mainlty there are three cases where markets will often fail to produce efficient outcomes and these are viz;  monopoly, public goods, or presence of externalities. All these market situations are not competative markets as they create less incentive by firms to continue or there are other obstacle which restricts or is diffulct for other firms to enter the market resulting in less competative. In case of private ownership of resources market will not not fails as private owners are getting thier incentives to continue the production. Similarly is the case in a market where cost and benefits are internalised. Thus opposed to presence of externaliites where in costs or benefits in some cases are generally faced by a third party which again creates situtaion of market failure, as less firms will operate to produce thise goods in which presence of externalitites. Thus less competition due to less firms in a market results in market failure, which is something common in monopoly market, public goods market or a market in presence of externalities.