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

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Question 26

Which one of the following economic scenarios is most likely to result in a missing market and complete market failure?

The market underproviding educational services due to positive externalities.

The free-rider problem preventing private firms from supplying non-excludable public goods.

Consumers experiencing asymmetric information when purchasing complex insurance policies.

Monopolistic firms restricting output to charge higher prices in the utility sector.

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