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Which of the following is an example of a market failure? a
Which of the following is an example of a market failure?
a. There are not enough tickets available to concerts of extremely popular performers and artists.
b. Successful public schools provide benefits to the students who attend them, as well as to the community as a whole, including those who don't go to those public schools.
c. Sharply declining prices of electronic equipment result in large numbers of bankruptcies in the computer industry.
d. The price of medical care has risen dramatically as a result of the introduction of sophisticated equipment and procedures.
Expert Solution
The correct answer is: b. Successful public schools provide benefits to the students who attend them, as well as to the community as a whole, including those who don't go to those public schools.
Explanation:
The market failure is the position when there is deficient distribution or supplies of goods and amenities in the market. It occurs when the supplies of products or services are not equal to the quantity demanded. Hence, the option c) indicates the inadequate distribution of product and services which will outcome in the free-rider problem.
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