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1.8 The market mechanism, market failure and government intervention in markets

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Question 7

Which one of the following is a primary source of market failure?

An increase in a consumer's utility from purchasing a cheaper substitute good

The underprovision of merit goods due to consumers having imperfect information

Government intervention to implement a minimum price on demerit goods

A reduction in industry average costs as a result of external economies of scale

1.8 The market mechanism, market failure and government intervention in markets Questions

  1. A Level
  2. /Economics
  3. /1.8 The market mechanism, market failure and government intervention in markets