Which one of the following economic situations represents a partial market failure, rather than a complete market failure or the successful operation of the price mechanism?
A private developer decides not to construct a lighthouse on a rocky headland because she cannot exclude non-payers from benefiting from its light.
The market price of crude oil rises rapidly following a sudden reduction in global supply, causing haulage firms to reduce their fuel consumption.
Single-use plastic packaging is produced and consumed in large quantities, but the market price does not reflect the long-term environmental cleanup costs.
A long-established high-street department store chain goes into administration because consumers prefer to purchase goods from online retailers.
378 exam-style questions on AQA A Level Economics 1.8 The market mechanism, market failure and government intervention in markets, covering 1.8.1 How markets and prices allocate resources, 1.8.2 The meaning of market failure, 1.8.3 Public goods, private goods and quasi-public goods, 1.8.4 Positive and negative externalities in consumption and production, 1.8.5 Merit and demerit goods, 1.8.6 Market imperfections, 1.8.7 Competition policy (A-level only), 1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only), 1.8.9 Government intervention in markets, and 1.8.10 Government failure. Each one has a worked solution and a mark scheme showing where the marks go.