An agricultural firm purchases a specialized irrigation system for £75,000, expecting it to reduce water usage by 30%. However, because the manufacturer withheld performance data showing the system is highly inefficient in clay-heavy soils, the firm's water usage actually increases, yielding only £20,000 of realized benefit.
Which economic concept explains the market outcome at the point of purchase?
Negative externalities of production
Moral hazard
Information failure
The free-rider problem
