Explain the two types of market failure and given an example of each one
Please provide the best answer for the statement.
The first type is a demand-side market failure that occurs when the consumer demand curve does not reflect the full willingness to pay for a good or service. An example of this type of failure would be fireworks displays. People frequently are not willing to pay for them because they often can view them without having to pay. As a consequence, there is no private market for fireworks displays because it would not be profitable for a firm to provide such displays which many consumers can watch without having to pay. The second type is a supply-side market failure that arises when the cost of production is not fully reflected in the supply curve. For example, if a business firm is able to discharge emissions without paying for the full cost it imposes on other people in the form of pollution or other problems, then there will be more production of the product than is desired by society because the price of the product does not take into account the full cost of producing it.
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In colonial Georgia,:
a. communal agriculture was successful. b. cotton plantations were flourishing by the early 1700s. c. the slave population assisted free colonists in defending the Florida border. d. slavery was initially prohibited.
Which of the following serves only the best known and heavily traded securities?
a. NYSE b. multiple regional exchanges c. AMEX d. NASAQ
People have become more concerned about the negative health effects of eating carbohydrates and fat. Considering these effects only, which of the following best describes the likely effect of this trend on the market for high-carb, high-fat snacks?
A. Demand and supply both shifted to the left leading to a decline in equilibrium price and quantity. B. Demand shifted to the left leading to a decline in equilibrium price and quantity. C. Quantity demanded fell leading to a decline in equilibrium price and quantity. D. Supply shifted to the left leading to a rise in equilibrium price and a decline in equilibrium quantity.
A reaction function is
A) companies colluding in order to make higher than competitive rates of return. B) the manner in which one oligopolist reacts to a change in price made by another oligopolist in the industry. C) a game in which firms will not negotiate in any way. D) when plans made by firms are known as game strategies.