Which one of the following is an example of market failure arising specifically from an information gap?
A shift in consumer preference towards electric vehicles after a rise in the market price of diesel fuel
A local council funding street lighting in a residential area because private firms cannot exclude non-payers
Consumers overconsuming processed foods because they lack full knowledge of the long-term health risks associated with high sodium intake
A pharmaceutical company charging a high price for a patented medicine to recover its initial research and development costs
15 exam-style questions on Edexcel A A Level Economics 1.3.4 Information gaps. Each one has a worked solution and a mark scheme showing where the marks go.