Chapter 14R, Problem 12MCQ

To determine

The correct option for goods provided by markets.

Answer to Problem 12MCQ

From the available options, the correct option is fishing in many waterways brings the quantity of fish below its socially optimal level.

Explanation of Solution

In a market failure, the price of goods can be high and people cannot affect the price of the good due to market inefficiencies if they need goods. Less selling and buying quantity by sellers and consumers do not always occur due to market failure but can happen due to any other effect such as quality, availability of raw material, labor, etc.

But here is an exhaustion of resources to produce goods which may decrease the supply of goods in the future, which means the correct option is c (fishing in many waterways brings the quantity of fish below its socially optimal level) and all options: a, b, d, and e are incorrect.

Economics Concept Introduction

Introduction: Market failure refers to a situation that causes unequal distribution of goods and services in the market such as charging a very high price by setting up a monopoly which makes people incapable to purchase.